Fuel prices rise by Rs 8.50 per litre during peak of Covid

You May not have realised it, but your fuel bill silently increased by about 10 per cent in the past two months during the peak of the second Covid wave that disrupted millions of lives in the country.

Starting from a price line of Rs 90.40 a litre on May 1, petrol is now priced at Rs 98.81 a litre in the national capital, rising by a sharp Rs 8.41 per litre in the last 60 days. Similarly, diesel price in the capital also rose by Rs 8.45 per litre in the past two months to reach Rs 89.18 a litre in Delhi.

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Though, oil companies gave respite to consumers on Wednesday, keeping fuel prices unchanged, the price pause has come after rates have been revised upwards in 32 out of 61 days between May and June to make retail rates touch new highs across the country.

Officials in oil companies put the consistent increase in fuel prices to development in global oil markets where both product and crude price have been firming up for past couple of months on demand rise amidst slowing of pandemic. However, closer look at fuel retail prices in India gives a picture that it is high level of taxes that is keeping fuel rate higher even in times when global oil prices are firm.

Global crude oil price is now hovering around $75 a barrel. It was over $80 a barrel in October 2018 but even the petrol prices hovered around Rs 80 a litre across the county. So, even with lower oil prices now, petrol prices have hit century and crossed it by a wider margin now in several parts of the country.

On Wednesday, oil marketing companies (OMCs) kept petrol, diesel retail rates unchanged, but officials said it might again rise in coming days and only way retail prices could be brought down in this period is by way of tax cuts by both the Centre and the states.

Fuel prices are already touching new highs everyday. Petrol price is most expensive in Rajasthan's Sri Ganganagar where it is now retailing at Rs 109.67 a litre. Even diesel in the city is priced at a high of Rs 102.12 a litre.

In the city of Mumbai, where petrol prices crossed Rs 100 mark for the first time ever on May 29, the fuel price reached new high of Rs 104.90 per litre on Tuesday. It remained at the same level on Wednesday. Diesel prices also increased in the city to reach Rs 96.72 a litre, the highest among metros.

With global crude prices also rising on a pick up demand and depleting inventories of world's largest fuel guzzler - the US, retail prices of fuel in India is expected to firm up further in coming days. The benchmark Brent crude reached multi year high level of over $75 on ICE or Intercontinental Exchange.