Though sharp plunge in global crude price was expected to provide relief to end consumers as lower prices, fuel rates both for petrol and diesel have been the same as on March 14. This means prices have been steady for 40 straight days even as last week we saw oil trending in the negative territory for the first time in futures markets.
On March 14, as global crude recorded a single-day fall of 30%, the centre hiked excise duty on auto fuel by as much as Rs. 3 per litre. Now since then prices of crude have further plummeted by as much as 40-50%, and Indian basket now is priced at around $20 per barrel but fuel prices have remained constant since then barring the state of Assam where the VAT component was increased to meet financial exigencies faced by the state.
On Saturday (April 25, 2020), 1l of diesel and petrol is priced at Rs. 62.29 and Rs. 69.59, respectively which is close to prices on March 14. This is even when oil retailers in India follow dynamic pricing model.
"A $15 per barrel fall in crude prices since mid-March should have resulted more than Rs 5 per litre price drop for petrol and diesel. But it seems oil companies are still providing themselves cushion for holding back increase when government raised excise duty on products last month and anticipating a further increase in future now," said a former top executive of public sector oil marketing firm said.