Petrol prices surge Rs 38.5 per litre, or 54%, in 17 months

Petrol prices surge Rs 38.5 per litre, or 54%, in 17 months

Petrol prices in the country have risen Rs 38.5 per litre, or 54%, in seventeen months, an unprecedented pace, as oil prices sharply recovered from the pandemic lows. Diesel prices are up Rs 29 per litre, or 42%.

After Monday’s 35 paise per litre hike, petrol and diesel cost Rs 109.69 and Rs 98.42 per litre, respectively, in Delhi. Rates are higher in states with more local taxes. In Mumbai, petrol costs Rs 115.50 and diesel Rs 106.62. In Ganganagar, Rajasthan, which has one of the costliest fuels in the country, petrol costs Rs 121.78 and diesel Rs 112.71 per litre.

Crude oil prices have risen 127% to $84 per barrel. Domestic fuel consumers are facing a double whammy of spiralling international prices and steep taxes. The Central government raised duties on petrol and diesel by Rs 13-16 per litre in March-May last year after the crude oil price collapsed in the international market.

The steep increase in taxes was offset by ultra-low oil prices, resulting in little change in domestic fuel prices then. But after international crude prices started recovering in the following months, domestic fuel prices too started climbing. The current record-high prices have been cited by economists as a risk to the country’s economic recovery.

In Delhi, a consumer pays Rs 58.21 in taxes on a litre of petrol, including Centre’s Rs 32.90 and State’s Rs 25.31. Of the total taxes of Rs 46.17 on a litre of diesel, the Centre takes Rs 31.8 and the state Rs 14.37.

Oil prices have rallied a quarter in the last two months to $84 a barrel as demand has returned at a faster-than-expected pace while supply has been slow to respond. A massive jump in natural gas prices has also prompted many consumers to switch back to oil, putting pressure on crude prices. OPEC+, a group of nearly two dozen oil-producing countries led by Saudi Arabia and Russia, has kept supplies artificially curbed, boosting prices.

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