Fuel prices get a breather after new all-time high

NEW DELHI: Petrol and diesel prices remain at record high levels after daily hikes over the past few days, but were kept static for a second straight day on Monday by oil marketing companies. While petrol prices in Delhi remained unchanged at Rs 85.70 a litre, diesel prices were maintained at Rs 75.88 a litre in the national capital (cheapest among metros). In Mumbai, the petrol and diesel prices are at Rs 92.28 and Rs 82.66 per litre, respectively, according to a price notification from fuel retailers. On January 23, petrol touched an all-time high of Rs 85.70 per litre in Delhi after rates were raised four times last week.

Prices, however, vary from state to state depending on the incidence of local taxes. In Chennai, for instance, petrol prices stood at Rs 88.29 on Monday, and a litre of diesel costs Rs 81.14. In Bengaluru, petrol is retailing at Rs 88.59 and diesel at Rs 80.47. In fact, in two towns of Rajasthan the extra premium petrol was retailed at a historic high of Rs 100 per litre.

After the festive season, retail fuel prices saw an upward trend at the end of November 2020 and starting December 6, 2020, there was a month-long pause on prices. Even though retail prices are connected to international product prices and are calculated on a 15 days lag, the prices began to rise starting January 6, leading to demands for a cut in excise duty.  International oil prices firmed up on hopes of demand returning from the rollout of vaccines. Brent crude prices, which crashed from $66 per barrel in early 2020 to $19 per barrel in April due to lockdown and travel restrictions that resulted in lower crude and fuel demand, had touched $55.71 a barrel on January 25, 2021.

Meanwhile, the Centre hiked excise duty twice in 2020, which followed by a hike in state levies are pinching the consumers. Petrol saw a hike of 65 per cent and diesel 101 per cent on account of the duty hike in 2020. In absolute numbers, the excise duty on petrol was raised to Rs 32.98 per litre from Rs 19.98 and diesel to Rs 31.83 per litre from Rs 15.83. Every Rs 1 a litre increase in excise duty adds about Rs 14,500 crore to the government’s kitty.