Gasoline and diesel prices in India have started to soar as national oil marketing companies have revised fuel prices. On Tuesday, petrol and diesel prices were raised for the seventh time since the end of a four-and-a-half-month hiatus in rate reviews on March 22.
On the first four occasions, prices were raised by 80 paise per liter – the biggest one-day rise since the introduction of the daily price review in June 2017. On Sunday, the price of petrol rose by 50 paises per liter and diesel 55 paise. On Monday, the price of petrol was increased by 30 paise per liter and diesel by 35 paise. Today, tariffs are increased by 80-85 paise and 75 paise respectively for petrol and diesel.
Overall, the petrol price has increased from Rs 4.80 to Rs 4.85 per liter and the diesel tariff has been increased by Rs 4.85 per litre.
Fuel rates have been increased nationwide, but prices vary from state to state depending on the incidence of local taxation.
INTERNATIONAL OIL PRICES
Crude oil prices on the international market fell sharply on Monday as Ukraine and Russia headed for peace talks and on fears of lower fuel demand in China after the country began its the most extensive coronavirus lockdown in two years to carry out mass testing and control a growing epidemic in Shanghai, the financial hub.
On Tuesday, global benchmark Brent crude oil futures were trading down $1.18, or 1.1%, at $111.30 a barrel. U.S. West Texas Intermediate (WTI) crude futures hit a low of $103.46 on Tuesday and fell $1.09, or 1.0%, to $104.87 a barrel, according to a report from Reuters.
Both benchmark contracts lost around 7% on Monday.
Oil prices remain volatile amid Russia’s invasion of Ukraine.
PETROL AND DIESEL PRICES IN INDIA
- On Tuesday, the price of petrol broke through the 100 rupees mark in Delhi to reach 100.21 rupees per liter and the diesel price in the nation’s capital is 91.47 rupees per litre.
- In Mumbai, the prices of petrol and diesel per liter are Rs 115.04 and Rs 99.25.
- In Chennai, the price of petrol is Rs 105.94 and the price of diesel is Rs 96.
- In Kolkata, the price of petrol is Rs 109.68 and the price of diesel is Rs 94.62.
WHY FUEL RATES ARE SOAR
Petrol and diesel prices had been frozen since Nov. 4 ahead of parliamentary elections in states like Uttar Pradesh and Punjab – a period in which the cost of the raw material (crude oil) soared d around $30 a barrel.
The rate review was expected shortly after the votes were counted on March 10, but was postponed for a few weeks.
The retail price increase justified by the rise in crude oil prices during the 137-day pause from around $82 a barrel to $120 is huge, but state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are forwarding the required increase in stages.
- Last week, Moody’s Investors Services said state retailers together lost about 19,000 crore rupees ($2.25 billion) in revenue for holding down petrol and diesel prices during the election period. , according to a PTI report.
- The oil companies “will have to increase the prices of diesel from Rs 13.1 to Rs 24.9 per liter and from Rs 10.6 to Rs 22.3 per liter of petrol (petrol) at an underlying gross price of 100 at $120 a barrel,” PTI reported quoting Kotak Institutional Equities. .
- CRISIL Research said an increase in the retail price of Rs 9 to Rs 12 per liter will be required for a full pass-through of an average of US$100 per barrel of crude oil and Rs 15 to 20 per liter if the average price of crude oil amounts to USD 110-120.
India is 85% dependent on imports to meet its oil needs and retail tariffs therefore adjust according to global movement.
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