On Monday, fuel prices in India touched a new record high after state-owned oil marketing companies raised rates by 25 paise per litre.
Petrol prices per litre were raised to Rs 84.95 in New Delhi, Rs 86.39 in Kolkata, Rs 91.56 in Mumbai and Rs 87.72 in Chennai.
Diesel prices per litre on 18 January were at Rs 75.13 in New Delhi, Rs 78.72 in Kolkata, Rs 81.87 in Mumbai and Rs 80.52 in Chennai.
Retail prices of both the fuels have surged to the highest ever in the National Capital Region (NCR) on Monday, after the latest hike.
After holding the retail price of petrol steady for 29 days, oil marketing companies in India started increasing prices in January.
Though petrol and diesel rates are to be revised on a daily basis in line with benchmark international price and foreign exchange, government-controlled fuel retailers have been moderating rates since the pandemic broke out.
This is after they adjusted a Rs 13 per litre hike in excise duty on petrol and Rs 16 a litre on diesel, against a decrease in the retail selling price that was warranted by crude oil prices falling to an average of $19 per barrel in April. The increase in taxes by the central government in 2020 was through special additional excise duty and the additional excise duty, collected as road and infrastructure cess.
Both state and central governments raised the tax burden on fuel consumers to compensate for the loss of revenue during the nationwide lockdown and subsequent fall in vehicle movement amid the pandemic.
Since May 2020, petrol price has risen by Rs 15.29 per litre and diesel by Rs 12.84 a litre, price notifications of oil companies showed.
International oil prices have been rebounding from the lows of April after the worldwide coronavirus vaccine roll-out, causing an upward revision in retail rates in India in January.
Petrol and diesel prices in India are set based on the daily changes in international crude oil rates, foreign exchange fluctuations as well as taxes (central, state and local taxes).
The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was $55.55 a barrel on 14 January.
There are increasing calls for the government to lower taxes on transportation fuels, as taxes and the commission of dealers are added to the refinery gate price of auto fuel to arrive at the retail price.