Petrol and diesel prices were hiked again on Friday, February 19, for the eleventh day in a row. Fuel rates are on an upward spiral, hitting record highs across metros, while they have already crossed the Rs 100 mark in some cities.
State-run oil marketing companies increased the price of petrol and diesel by 27-35 paise per litre. This has driven up retail rates, which vary from state to state contingent on the incidence of local sales tax or VAT as well as freight charges.
Regular petrol rate crossed the Rs 90 mark for the first time in Delhi at Rs 90.19 per litre as against Rs 89.88 on Thursday, while diesel price climbed to Rs 80.60 a litre, as per data from the Indian Oil Corporation website. In the last 11 days, petrol and diesel prices have shot up by Rs 3.26 per litre and Rs 3.81 a litre in the national capital region.
In Mumbai, petrol and diesel rates are up by 30 and 35 paise respectively. A litre of petrol now costs Rs 96.62, while diesel is priced at Rs 87.67 per litre. In Bengaluru, petrol costs Rs 92.37 per litre, while diesel price stands at Rs 85.74 a litre.
The unchecked and successive hikes in fuel prices have been criticised by opposition parties, including Congress, which has demanded an immediate rollback in taxes to alleviate the burden on the common man.
Petrol at Rs 100 in several cities
Petrol has already breached Rs 100-mark in several parts of Rajasthan and Madhya Pradesh. A litre of the fuel costs now costs Rs 100.82 in Ganganagar and Rs 100.17 in Hanumangarh. Diesel in these cities costs Rs 92.83 and 92.24 a litre. The price of regular petrol shot up to a record high of Rs 100.13 on Wednesday.
The unprecedented spike in Rajasthan came along despite the state government slashing VAT on petrol and diesel by 2 per cent last month. Albeit the VAT cut on petrol, the fuel, at 36 per cent plus Rs 1.5 per litre road cess, still costs the highest in the country. This is on top of the Rs 32.90 per litre on petrol imposed by the Centre and the new agri-cess.
In Madhya Pradesh's Anuppur, petrol is priced at Rs 100.57 per litre, whereas diesel costs Rs 91.04 a litre. In Nagarabandh, a litre of petrol is priced at Rs 101.08 while diesel rate stands at Rs 91.50 per litre.
Why are fuel costs rising?
Fuel rates have been on upward swing across the country, touching all-time highs due to rising global crude oil prices, high central and state levies, and tight fiscal headroom that has limited the government's ability to check the spike.
Meanwhile, Oil Minister Dharmendra Pradhan had informed the Parliament during the Budget session that the Centre is not mulling a reduction in excise duty to ease prices from their record highs. Global oil prices touched $61 per barrel for the first time in over a year on the back of improving demand outlook amid the rollout of coronavirus vaccines worldwide, the minister had said.
The fuel prices in India are determined on the basis of international crude oil prices and foreign exchange rates.The government has urged the oil producers' cartel - the Organization of Petrol Exporting Countries (OPEC), as well as its allies such as Russia to alleviate production cuts as higher prices are affecting demand and adding to inflation.
"The price-sensitive Indian consumers are affected by rising petroleum product prices," Oil Minister Dharmendra Pradhan said ahead of a March 4 policy-setting meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+.
Global oil prices slid as much as 2% in early trade on Friday, February 18, adding to overnight declines, on worries that refineries shut by a big freeze in the US South will take some time to revive operations and dent crude demand.