Gasoline prices have crossed ₹100 per liter in Delhi and Kolkata on Wednesday after fuel retailers hiked gasoline prices by 35 paise per liter and diesel by 17 paise in the early morning hours, even as international crude oil prices fell on Tuesday following an inconclusive meeting of the producer cartel – the Organization of the Petroleum Exporting Countries and its allies, including Russia (together known as OPEC +), over supply cuts.
National fuel retailers are aligning gasoline and diesel pump prices with their respective international benchmarks from the previous day, which often move in tandem with crude oil rates. Auto fuel pumping rates rose in India on Wednesday even as international oil prices fell sharply the day before.
A deadlock at the OPEC + meeting saw the profit reservation on Tuesday which caused Brent crude to drop sharply 3.4% to $ 74.53 a barrel after hitting the session high at 77, $ 84, the highest since October 2018. US West Texas Intermediate (WTI) crude also fell 2.4% to $ 73.37 that day, after hitting $ 76.98 on intraday trading , its highest level since November 2014.
The international oil price rally resumed on Wednesday, indicating an unrelated increase in gasoline and diesel prices in India. Brent opened weakly on Wednesday, but gained $ 1.40 or 1.88% to $ 75.93 a barrel during intraday trading.
Wednesday’s revision of India’s domestic fuel rates is the 36th hike in the past 65 days that has made gasoline more expensive by ₹9.81 per liter and diesel per ₹8.8 per liter since May 4, one day after the proclamation of the results of five legislative elections. Gasoline is now priced at ₹100.21 per liter and diesel at 89.36 per liter in New Delhi.
While the state-run Indian Oil Corporation (IOC) fuel prices in Delhi are the benchmark for the entire country, the retail prices of the two fuels differ from place to place due to variations in state taxes and local levies.
With the latest hike, gasoline prices in all major metros have crossed ₹100 per liter, Delhi and Calcutta being the latest entrants. Kolkata Pumps set the price of gasoline at ₹100.23 per liter and diesel at ₹92.50 per liter on Wednesdays. The cost of a liter of gasoline in the financial capital is now ₹106.25 per liter and diesel, ₹97.09.
The highest fuel rates were recorded in the Ganganagar of Rajasthan where pumps sell gasoline to ₹111.50 per liter and diesel at ₹102.78 per liter.
Soaring international oil rates and the exorbitant domestic tax structure are two main reasons for the high rates of gasoline and diesel at the pumps.
In Delhi, central levies account for 33.29% of the price of gasoline and state taxes 23.07%, according to official data as of July 1. On diesel, central taxes exceed 35.66% while state taxes are around 14.62%. Until 2020, as world crude prices fell, the central government increased excise taxes on fuel to consolidate its finances. States have also followed suit – with revenues affected as a result of the pandemic.
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The relentless upward movement in fuel prices since May 4 has already seen gasoline cross ₹100 mark in various cities across the country, especially in the states and UTs of Maharashtra, Rajasthan, Andhra Pradesh, Madhya Pradesh, Karnataka, Telangana, Odisha, Manipur, Jammu-et -Kashmir, Laddakh, Punjab, Bihar, Kerala, Tamil Nadu and West Bengal.
Some of the towns selling gasoline for over ₹100 per liter are Mumbai, Ratnagiri, Parbhani, Aurangabad, Jaisalmer, Ganganagar, Banswara, Indore, Bhopal, Gwalior, Guntur, Kakinada, Chikmagalur, Shivamogga, Hyderabad, Leh, Imphal, Kalahandi, Sopore, Baramulla, Patruna, Mohahandi, Sopore, Baramullem, Patruna Darjeeling.
Even though international oil prices have been volatile since May 4, India’s auto fuel pumping rates have only moved upward. For example, although Brent crude dipped to $ 65.11 on May 20, the lowest of those 46 days; Gasoline and diesel prices increased the next day by 19 paise per liter and 29 paise per liter, respectively.
According to executives working at state-run oil marketing companies, prices at the pump are also high because companies were recouping their past revenue losses like that suffered for 66 days since Feb. 27, when rates did not ‘were not increased due to assembly elections in four states and one Union. territory.
During the 66-day hiatus on tariff hikes, state-run retailers also slashed politically sensitive gasoline and diesel prices by 77 paise and 74 paise per liter, respectively in four small steps. But, all gains for consumers were quickly reversed in the first four consecutive rounds of rate hikes starting May 4.
The government deregulated the prices of gasoline on June 26, 2010 and diesel on October 19, 2014. As a result, state-run retailers are free to change prices at the pump every day. Public sector retailers – IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) – control nearly 90% of the domestic fuel retail market.
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