Petrol, Diesel Prices Stable For The 6th Straight Day

Fuel prices in India were unchanged for the sixth straight day on 5 March.

Petrol prices per litre stayed at Rs 91.17 in New Delhi, Rs 91.35 in Kolkata, Rs 97.57 in Mumbai and Rs 93.11 in Chennai.

Diesel prices per litre were stagnant at Rs 81.47 in New Delhi, Rs 84.35 in Kolkata, Rs 88.60 in Mumbai and Rs 86.45 in Chennai.

Rates are currently at all-time highs. These rates are revised on a daily basis by oil marketing companies in line with changes in the international prices and the rupee's exchange rate. Oil prices have been on a rise since January on optimism in the global economy after progress in the US stimulus package and on hopes for improving fuel demand as vaccines are rolled out.

Brent crude, the international benchmark for oil prices, rose 10 cents, or 0.2%, to $66.84 a barrel, but was down from a high of $67.75 hit on Thursday, after OPEC and its allies agreed to not increase supply in April.

However, in India, taxes make for a significant chunk of the final price paid by consumers on fuel. While, central excise duty alone makes up for 39% of the petrol price and 42.5% of diesel price, state and local taxes pile on to this burden. At present, of the retail price paid by consumers in India at fuel stations, roughly 60% of the retail price accounts for taxes.

The surge in oil prices and high central, as well as state taxes, have pushed the price of petrol in certain regions past Rs 100 per litre. Petrol in Madhya Pradesh is currently priced at Rs 100.14 per litre.

Recently, economists at SBI said that based on their calculations, petrol price can go down to Rs 75 a litre across the country if brought under the ambit of the Goods and Services Tax (GST), but there is a lack of political will which is keeping these fuel product prices at one of the highest in the world.

According to the calculation performed by these economists, diesel will come at Rs 68 a litre and the revenue loss for the centre and states will be only Rs 1 lakh crore or 0.4% of GDP. The calculation was made under the assumption of global crude prices at USD 60 a barrel and exchange rate at Rs 73 per dollar, which is close to the current rates.