As Fuel Prices Record New Highs, Govt Hopes it is Temporary

Petrol and diesel prices have gone up by almost a rupee per litre within a fortnight. Diesel prices recorded a new high in all four metro cities today. It is at Rs 70.14 per litre in Delhi, Rs 74.24 in Mumbai, Rs 72.78 in Kolkata and Rs 74.86 in Chennai. Petrol per litre is priced at Rs 78.30 in Delhi, Rs 85.72 in Mumbai, Rs 81.23 in Kolkata and Rs 82.35 in Chennai, according state-owned marketer Indian Oil Corporation Limited's Website.

Today was the fifth consecutive hike in fuel prices in the country. The government said on Wednesday that it hopes that the rally in global rates is temporary and there would be a decline soon.

Even in Delhi, where the fuel is cheapest in all metros and most state capitals due to lower sales tax or VAT, diesel price crossed the 70-mark for the first time while petrol price lingers close to its all-time high on 78.43 per litre on 29 May.

"I earnestly believe that this increase in oil prices is really temporary," Economic Affairs Secretary Subhash Chandra Garg told PTI reporters. The fluctuations were seen coming, he said. "The crude (oil price) had gone down to the level of $70 per barrel and it is back to $74-75, it should be temporary. It is coming out of some countries not able to produce so I hope it remains temporary. We will be able to come back $70-71 per barrel soon," he said.

Fuel prices have been on the rise since August 16 after the rupee dipped to its lowest value against the US dollar. The domestic unit has been plummeting and touched a record low of 70.8 today. Fuel rates are being revised on a daily basis since June 2017 to reflect international rates and as India is highly dependent on imports for its oil requirement, the rising crude prices (from a stronger dollar) could hurt the country's trade deficit and pressurize the rupee further. This, in turn, will make fuel expensive for Indian consumers.