Petrol and diesel prices rose sharply for the second day in a row after oil marketing companies decided to break a week-long pause in price revision on Thursday, taking note of a surge in global oil prices as benchmark Brent crude touched $59 a barrel.
On Friday, the price of petrol has increased from 29 to 30 paise, while the price of diesel has increased from 30 to 32 paise. With this, the price of petrol in Delhi and Mumbai has reached an all-time high.
Accordingly, the retail price of diesel increased to Rs 77.13 a litre in Delhi from earlier Rs 76.83. Petrol price reached another new high of Rs 86.95 a litre as against Rs 86.65 on Thursday.
Though firm global crude and product prices led to an increase in retail prices of petrol and diesel, it is interesting to note that even though the crude has been hovering just over $55 a barrel for a long time, OMCs had paused increase in prices of auto fuels. The present increase comes after over $3 a barrel increase in crude prices in just a few days.
Crude price has remained firm for the last few weeks in the wake of unilateral production cuts announced by Saudi Arabia and a pick-up in consumption in all major economies globally.
The last few increases in pump prices in petrol and diesel have taken them to record levels in all major metro cities and towns across the country. The last time the retail prices of auto fuels were closer to current levels were on October 4, 2018, when crude prices had shot up to $80 a barrel.
The current price rise is largely on account of a steep increase in central taxes on petrol and diesel, apart from firm crude prices internationally. The Union Budget 2021-22 has also imposed a new agricultural infrastructure and development cess on the fuels. Although the cess wouldn't affect the price for the customers directly.
Petrol prices were very close to breaching an all-time high of Rs 84 a litre (reached on October 4, 2018) when these touched Rs 83.71 on December 7, 2020. But the upward march was halted ever since as no price revision was announced by the Indian OMCs in the month. The price uptick started again only on January 6.
Oil companies' executives said that petrol and diesel prices may increase further in the coming days as retail prices may have to be balanced in line with global developments to prevent the OMCs from losing money on the sale of auto fuels.