On Tuesday, revision in fuel prices in India was paused again a day after diesel prices were raised to new all-time highs.
On 30 June, petrol prices per litre remained at Rs 80.43 in Delhi, Rs 87.19 in Mumbai, Rs 83.63 in Chennai, Rs 83.04 in Bengaluru and Rs 82.10 in Kolkata.
Diesel prices per litre were at Rs 80.53 in Delhi, Rs 78.83 in Mumbai, Rs 77.72 in Chennai, Rs 76.58 in Bengaluru and Rs 75.64 in Kolkata.
In the last three weeks, back-to-back upward revision in prices has been affecting household budgets. The central and state governments, along with oil marketing companies are looking to make up for their loss in revenues due to the lockdown and slowdown in economic activity has been the reason for the recent hike in fuel prices.
Additionally, diesel has now become costlier than petrol in Delhi.
Experts say that while in the international market, diesel is slightly costlier than petrol due to higher cost of production, in India, tax on diesel have been kept lower than petrol since the fuel is primarily used by transporters and farmers. While this continues to be the case in most states, the gap between petrol and diesel prices is narrowing.
High diesel prices will increase transportation costs and subsequently cause a surge in your money grocery bills as vegetables and fruits get costlier.
On 4 May, the Delhi government had increased VAT on both the fuels to 30 percent. For diesel, it was increased from 16.75 percent earlier causing a surge of Rs 7.10 per litre, which is much higher than the impact on petrol that was imposed with a state VAT of 27 percent earlier, increasing its rate by Rs 1.67 a litre.
Additionally, the central government had increased the excise duty on per litre of petrol by Rs 10 and per litre of diesel by Rs 13. In fact, several state governments have also hiked their VAT or cess on fuel in the last month.
Due to the hike in state VAT and excise duty, diesel price in Delhi is now the highest among metros in the country, a contrast from having the lowest fuel prices among metros in the pre-COVID period. Mumbai continues to sell the costliest petrol among metros.
While diesel has been recording new highs since 19 June, petrol prices are also close to the all-time high rates last seen in October 2018 when international oil prices had spiked close to $80 per barrel. In October 2018, petrol price in Mumbai had crossed Rs 90-mark and in Delhi, it was around Rs 83 per litre.
In comparison, on Tuesday, Brent crude, the international benchmark for crude oil prices, was trading at $41.76 a barrel.
Fuel prices are revised by state-owned oil marketers on a daily basis, based on international oil prices, forex rate and central, state/ local taxes.