On Tuesday, a litre of petrol rose to ₹ 96.21 at the Rajdhani Service Station in Delhi, while diesel rates increased to ₹ 87.47 per litre, reflecting an 80 paise increase from petrol costs of ₹ 95.41 on Monday, while diesel rates stood at ₹ 86.67 per litre.
That increase in retail fuel prices comes for the first time since November and has remained unchanged across metro cities for the most prolonged duration since the daily revision of prices began in June 2017.
But speculation was that fuel prices might rise as assembly elections have ended in Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur.
The Centre had cut excise duty on November 4, 2021, to give relief from prices that had reached an all-time high level. The government had slashed the duty on petrol by ₹ 5 per litre and diesel by ₹ 10 a litre, leading to a substantial reduction in fuel prices.
Later in December 2021, the Delhi government had reduced the value-added tax (VAT) on petrol from 30 per cent to 19.40 per cent. With this, petrol prices in the national capital were slashed by ₹ 8.56 per litre.
India imports about 85 per cent of its oil needs, making it the world’s third-biggest oil importer and consumer. The country’s local petrol and diesel prices are linked to the international costs of the two fuels, which move proportionally to crude prices.
The benchmark Brent crude oil prices have risen sharply to nearly $120 per barrel on the escalation in the Russia-Ukraine conflict and have put pressure on state fuel companies to increase the retail prices.
Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – the three big state-run companies – dominate fuel retailing and tend to move their prices together.
Reuters had reported late on Monday that retail fuel prices were to rise from Tuesday for the first time after a 4-month hiatus, citing two dealers, with one of them adding that there could be a regular increase in pump prices.
Still, the latest price increase means consumers will pay less than 1 per cent more at the pump, despite a substantial increase in global oil prices since the conflict in Ukraine began last month and a falling Indian rupee, the Reuters report said.
The government last week said it was keeping a close watch on evolving geopolitical developments and would make ‘calibrated interventions’ to keep fuel prices under control “to safeguard the interest of the common man.”
With inputs from NDTV