Petrol in Delhi still lower than its highest of Rs 84/litre touched on October 4, 2018.

Retail price of diesel in Delhi crossed Rs 80/litre mark for the first time in history, mainly due to the hefty taxes imposed in early May by the Union and state governments and oil marketing companies’ bid to shore up marketing margins. On Thursday, diesel in the national capital cost Rs 80.02/litre while petrol was priced at Rs 79.92/litre.

This happened a day after it became more expensive than petrol in the national capital which was in itself another landmark development. Diesel surpassed petrol exactly a week after it touched the all-time high price of Rs 75.79/litre on June 17. Petrol in Delhi still lower than its highest of Rs 84/litre touched on October 4, 2018.

State-run oil marketing companies (OMCs) raised its price for the 18th day in a row to revive marketing margins, which were hit to absorb the Rs 10-13/litre rise in excise duty imposed by the Centre. The Delhi government had also increased VAT on diesel to 30% from the previous rate of 16.8%. The latest auto fuel prices are around the record rates discovered in October, 2018, even though Indian basket of crude is currently trading at $42.4/barrel, about 50% lower than the comparable period.

Experts have pointed that prices will likely rise further as global crude rates have been gradually rising and current retail rates reflect the global price movements of the preceding fortnight. Of the retail auto fuel rates, excise duty comprise about 42% and state VAT another 23%.

The gap between the prices of these auto fuels was gradually narrowing since the rates were raised since June 7. Auto fuel marketing margin of OMCs had slipped into the red at minus Rs 1.28/litre on June 6, and has revived to above Rs 3/litre due to retail price hikes. Rising fuel rates is seen to have a debilitating effect on public transport sector which is already under severe duress due to the coronavirus crisis. “Social distancing norms have slashed capacity by 50% as it is, operators will now be forced to pass on the hike to passengers, sending ticket prices through the roof,” said Prasanna Patwardhan, president of the bus and car operators confederation of India.