NEW DELHI: Prices of petrol and diesel on Tuesday breached the Rs 100 a litre mark across the country as Oil Marketing Companies (OMCs) hiked prices for the seventh time in eight days. Petrol and diesel prices went up by 80 and 70 paise a litre respectively.
In the National Capital Region, petrol is retailing at Rs 100.21 a litre while diesel is selling at Rs 91.47; in Mumbai, petrol costs Rs. 115.04 while diesel costs Rs 99.25. As per the price notification, the cheapest petrol price is in Dehradun, where it costs Rs. 98.64 per litre and highest is in Aurangabad, where it is retailing at Rs. 116.65 per litre.
The price of transport fuel is revised by the OMCs on a daily basis, in line with international crude price. However, petrol and diesel prices were kept unchanged since November 4 last year when the government cut excise duty on petrol by Rs. 5 per litre and by Rs. 10 on diesel. It said the reduction in excise duty on transport fuel will boost consumption and keep inflation low. Since then, the crude price in the international market has seen various ups and downs. The Brent Crude Future, the benchmark of the oil price in the international market, even touched $139 per barrel, the highest since 2008.
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Therefore, many believed that once the election is over in the five states on 10 March, the petrol and diesel price could witness a major hike. The daily price revision of transport fuel started on 22 March. Since then, fuel retailers have hiked petrol and diesel prices by Rs 4.80 per litre.
Experts believe the hike in the petrol and diesel price is expected and more such hikes are to come. A report of J P Morgan noted the fuel prices may be hiked to bridge the Rs 9 a litre gap created by international oil prices soaring past $100 a barrel. It said with Brent Crude trading at $105 per barrel, the OMCs are losing Rs 5 to 7 per litre. The Brent Crude future on 29 March was trading at $112.69 per barrel while WTI was trading at $105 per barrel. Thus, the hike in the retail price of petrol and diesel was imminent.
Dipti Deshpande, Principal Economist of CRISIL Ltd said the impact of the hike on transport fuel and LPG will largely show up in the April inflation numbers. “If Brent prices stay above $90 per barrel throughout the next fiscal, the government may need to cut excise duties further to alleviate the burden on consumers,” said Deshpande.
The prices of petrol and diesel vary from state to state, depending on the incidence of local taxes like value-added tax (VAT) and freight charges. Therefore, one could find a variation in prices. Petrol prices are under Rs. 100 in Agra (Rs. 99.84 per litre), Ahmedabad (Rs. 99.90 per litre), Vadodara (Rs. 98.64 per litre), Guwahati (Rs. 99.89 per litre ), Kanpur (Rs. 99.75 per litre) and Surat (Rs. 99.79 per litre). The highest petrol price is in Bhopal (Rs. 112 per litre), Hyderabad (Rs. 113 per litre), Mumbai (Rs. 115 per litre), Nashik (Rs. 115 per litre) and Visakhapatnam (Rs. 113.43 per litre).
India is the world's third-largest oil consumer and imports 85% of its needs. It mainly imports from the Middle East, Africa and North America.