Petrol prices scaled a record high on Wednesday, in line with rising global fuel prices and positive news on coronavirus vaccines, increasing calls for the government to lower taxes on transportation fuels.
Oil marketing companies (OMCs) raised the retail price of petrol by 25 paise to ₹84.45 per litre in Delhi. Diesel prices were raised by an equal amount to ₹74.63 per litre.
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Diesel prices are also retailing at a record high in Mumbai.
Petrol prices were last increased on 7 January. After holding steady for 29 days, petrol prices were raised by 26 paise per litre on 6 January and again by 23 paise a litre on 7 January.
Before this price hike in January, the previous all-time high for petrol was ₹84 per litre on 4 October 2018 in Delhi. Diesel touched an all-time high of ₹81.94 a litre on 30 July 2020.
In 2020-21, India, the world’s third-largest oil importer, raised taxes on petrol and diesel by ₹13 and ₹16, respectively, in two tranches, through a special additional excise duty and an additional excise duty, collected as road and infrastructure cess.
India is vulnerable to any changes in global crude oil prices and supplies. At the time of writing this story, the benchmark Brent crude was trading at $56.69 per barrel on Wednesday, a sharp rise from $18.38 a barrel in April last year when many nations announced lockdowns to curb covid-19. The West Texas Intermediate was trading at $53.42 a barrel.
Covid had severely crimped global energy demand, but the announcement of several successful vaccine candidates caused a spike in international crude oil prices.
Also, oil prices have been on an upswing after the 13th Organization of the Petroleum Exporting Countries (Opec)+ meeting for “adjustments to the production level for February and March 2021″. The Opec+ December decision was to boost crude output by 500,000 barrels per day (bpd) from January and eventually return to 2 million bpd. The Opec+ decision is significant for India as Opec makes up for about 40% of global output and 83% of India’s oil imports.
The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was $55.76 a barrel on 12 January. It averaged $56.43, $69.88 and $60.47 per barrel in FY18, FY19 and FY20, respectively.
With the spread of the pandemic, the price fell to $19.90 in April before rising to $49.84 a barrel in December, data from the Petroleum Planning and Analysis Cell showed.