Fuel prices in India were hiked on Monday by state oil marketing companies even as international oil prices remained largely stable. On Sunday, prices were left unchanged after 21 consecutive days of upward revision.
On 29 June, petrol prices per litre were raised to 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 raised to 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.
The upward revision in prices in the last three weeks adds to the consumer's increased burden of state and central government taxes paid on fuel. 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.
On 4 May, the Delhi government had increased VAT on both the fuels to 30 percent. For diesel, it was an increase from 16.75 percent earlier causing an increase 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. In fact, now around 70 percent of the retail price of fuel is just some form of tax.
Due to the hike in state VAT and excise duty, diesel price in Delhi is the highest among metros in the country, a contrast from having the lowest fuel prices among metros in the pre-COVID period.
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 Monday, Brent crude, the international benchmark for crude oil prices, was trading below $41 a barrel and has been trading within the range of $38 to $41 per barrel for the last two weeks.
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.