The fuel prices were increased again today for the 14th time in two weeks. The prices have been consecutively increasing, after the revision in fuel prices began on March 22.
The prices of petrol and diesel vary in states due to different value-added tax and freight charges. At present, the cost of petrol is above Rs 105 per liter in Delhi and diesel around Rs 100. In Maharashtra, petrol is priced are around Rs 120, and diesel is at Rs 102.44. In Tamil Nadu, petrol will cost Rs 110.91 per liter, whereas diesel is Rs 101.02 per liter.
Compared to other states, Telangana residents will have to pay the most for fuel. Petrol is priced at Rs 120.82 per liter, and diesel will cost Rs 106.70 per liter here.
The oil marketing company revises and determines the prices of fuel in India. However, it is normal that during elections the prices are controlled from increasing further. The prices which were stagnant till March as there were elections in the five states of India started increasing towards the end of the month post the announcement of the results. The prices are expected to rise further as oil marketing companies (OMCs) revise prices in line with rising crude oil prices that is taking place globally.
How much will the prices rise?
The mechanism of how the prices are determined is explained by a few experts. They have noted that the retail price of petrol and diesel is hiked by Rs 0.52-0.60 for every $1 per barrel rise in the price of crude oil for OMCs to maintain normal marketing margins on the sale of auto fuels. The price of Brent crude has risen by about $28.4 per barrel since November 4 to $108.9 per barrel. This trend indicates that fuel prices could see further hikes of Rs 5.5-7.8 per liter each on petrol and diesel at the current price of Brent Crude.
After revising the price of LPG, the cooking fuel, has risen by Rs 50 taking the price to Rs 949 per 14.2 kg cylinder.
Reason for the sudden increase in prices
The vote bank appeasing politics has become one of the major reasons for this sudden increase in the prices of fuel. OMCs had, on November 4, halted price revisions for a 137 day period, during which the state Assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Manipur, and Goa took place.
The center had announced an excise duty cut of Rs 5 per liter on petrol and a cut of Rs 10 per liter on diesel convinced the OMC to hold the prices of the fuel for a period of 137 days from November 4. The restarting of revisions by the OMCS led to the whole burden of prices falling on people and the entire impact of the rise in international crude prices during the period is being passed on to consumers now.
Why is it increasing globally?
The ongoing war between Russia and Ukraine added to attacks on oil and gas infrastructure in Saudi Arabia has led to a situation of fear and uncertainty of potential disruptions in crude oil supplies which have pushed up crude oil prices.
What is expected from the government?
It is expected that the Centre will control the prices by cutting excise duty on both petrol and diesel. The central taxes are still high, even after a Rs 5 per liter cut in excise duty on petrol and a Rs 10 per liter cut in excise duty on diesel in November 2021. The central taxes are higher by Rs 8 per liter on petrol and by Rs 6 per liter on diesel compared to pre-pandemic levels. Central and state taxes currently account for about 43 percent of the retail price of petrol and about 37 percent of the pump price of diesel in Delhi.
Also, Checkout: Central government announces reduction of disturbed areas from Nagaland, Assam, Manipur
