Oil marketing companies have increased petrol and diesel price by more than Rs 2 to Rs 3.50 respectively since November,19 after holding them unchanged for 59 days. Diesel currently retails for Rs 73.87 a litre in capital city, while petrol retails for Rs 83.71 a litre. On Wednesday, petrol sold for $ 90.34 in Mumbai, according to data released by the Petroleum Planning and Analysis Cell (PPAC). The Petrol prices in India are now spiking high since October 2020.
While concerns over rising fuel prices, petrol and diesel sales prices rise again on Tuesday for the sixth time past month, which has resulted in price falling Rs 100-liter in areas from Nanded in Maharashtra to Rewa in Madhya Pradesh to Jaisalmer in Rajasthan.
According to price announcement by government fuel suppliers, petrol price has been increased by 27 litres per litre. Whereas, diesel has been increased by 30 litres per litre. This increase has pushed up price of gasoline and diesel to the highest level nationwide. In Delhi, petrol now comes to Rs 91.80 per litre, and diesel costs Rs 82.36.
This was the layer of sixth increase in prices since May 4, when state-owned enterprises completed an 18-day leave of absence from a review on level they had seen during convention elections in provinces such as West Bengal.
What causes fuel and diesel prices to rise?
According to experts, rising global crude oil prices, improved demand for petroleum products due to prospect of an effective Covid-19 vaccine are prime reasons for increase in fuel and diesel prices.
The price of Brent crude has risen to almost $49 a barrel, highest rate since beginning of March. The cost of Brent crude fell from $ 66 per barrel earlier this year to $19 per barrel in April due to global restrictions on travel as countries closed to control the transmission in novel coronavirus.
As India imports more fuel needed to meet its needs, oil prices rise in line with global prices. Domestic and oil companies are reviewing petrol prices according to changes in prices of international petrol and diesel.
However, as global oil prices fell and India began to close, the OMCs in India stopped revising petrol and diesel prices for more than 80 days.
"Globally, prices for crude oil prices have skyrocketed. The improvement in demand for the vaccine has been reflected in the increase in cracks in petrol and diesel,"
said Vivekanand Subramani, an analyst at Ambit Capital. He noted that impact of rising crude oil prices could be linked to recent inflation. The prevalence of cracks is difference between price of a barrel crude oil and that of a crude petroleum product such as diesel or petrol.
How many updates have been made to the price of petrol and diesel this year in India?
The latest 30 pipeline price hike is a 56-year review of e price of petrol in Delhi since April 1, According to data released by PPAC. The cost of diesel has been updated 67 times this year by 26 paise. Except for a short time in September-October when prices were reduced, petrol prices continued to rise sharply. This increase was in part due to additional activities and conclusions levied by the Institute and national governments. The Central Board of Indirect Taxes and Customs increased the toll on Road and Infrastructure and Special Additional Excise Duty for petrol and diesel in May 2020, following a similar announcement in March.
But why higher prices even though raw materials are cheaper than at beginning of the year?
The federal government and most of world's governments officials have significantly increased fuel and diesel efficiency to raise money since Covid-19-related closure has dramatically reduced economic activity. This has led to current price of petrol prices approaching in October 2018, when cost per bushel in crude Indian basket reaches $ 80.
State and federal taxes currently account for about 62% of sale price of petrol and 57.5% of diesel sales price in Delhi. The central government increased fuel tax to 32.98 a litre from Rs 19.98 earlier this year and increased diesel tax rate to 31.83 litres from Rs 15.83 over same period. Many countries, including Delhi, Maharashtra, Tamil Nadu, and Karnataka, have also raised government taxes on petrol and diesel since the start of the coffers to raise revenue.
How are prices different in India?
In Mumbai, where consumers pay highest petrol price, the price of petrol increased by 11% in October compared to last year. Delhi has increased by 10.35% compared to October last year. (CPI inflation at the same time was 7.61%.)
What are the various components of fuel prices?
Fuel tax in Delhi since 2014, the revenue collected by Institute from the sale of petrol and oil products has almost doubled. Additional taxes (collected by the state on price of petrol and the seller commission) make up less than a quarter of cost.
Together, taxes and jobs account for 63% of cost of fuel in Delhi. The price of petrol is less than one-third of price a consumer in Delhi receives from a dealer. Commercial commissions and commodity costs and base price make up just over a third of price.
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