Fuel prices increased again; Rs. 2.40/liter hike in four days
After a one-day pause, prices of petrol and diesel were once again increased by 80 paise on Friday. Over the last four days, fuel prices have been raised thrice, with petrol and diesel witnessing a total hike of Rs. 2.40/liter. As per the price notification from state fuel retailers, petrol will now cost Rs. 97.81/liter in Delhi, while diesel will retail at Rs. 89.07/liter.
Why does this story matter?
This is the third hike in fuel prices in four days, following the resumption of daily price revisions after a record 137-day long break. The increases reportedly mark the steepest single-day hike since the daily price revision began in June 2017. Despite a sharp increase in international crude oil rates, petrol and diesel prices remained unchanged in India from November 4, 2021, until Tuesday.
International price of crude oil rose by around $30/barrel
The international price of crude oil rose by around $30/barrel earlier this month because of the ongoing Russia-Ukraine conflict, reaching multi-year highs. However, India's fuel prices remained unchanged from November until after the results of Assembly elections in five key states—including Punjab and Uttar Pradesh—were announced. Oil companies, therefore, are now compensating for their losses that arose from maintaining the same rates for months.
A total hike of Rs. 15-20/liter is required
Oil companies need a total hike of Rs. 15-20/liter to fully offset the increase in international oil prices, as per CRISIL Research. The price of diesel sold to bulk users was recently increased by approximately Rs. 25/liter to reflect a nearly 40% increase in international oil prices. Also, the Indian rupee's depreciation against the US dollar has further increased the cost of imports.
How much does fuel cost in major cities?
Following Friday's price revision, the petrol rate in Mumbai was hiked to Rs. 112.51/liter, and diesel to Rs. 96.70/liter. In Kolkata, petrol and diesel rates stood at Rs. 107.18/liter and Rs. 92.22/liter, respectively. In Chennai, petrol and diesel now retail at Rs. 103.67/liter and Rs 93.71/liter, respectively. The price of petrol and diesel in Bengaluru on Friday is Rs. 103.11/liter and Rs. 87.37/liter, respectively.
US and its allies considering releasing their storage oil
Globally, meanwhile, the oil prices fell slightly as the United States and its allies considered releasing more oil from their storage to cool markets, news agency Reuters reported. Brent crude slipped 0.22% to $118.77 per barrel, while US crude fell 0.5% to $111.74 per barrel.
