Marking the eighth consecutive day of price hike, the four metros saw increase in price of petrol and diesel again on Monday.
In Delhi, Kolkata, Mumbai and Chennai, the price of petrol and diesel were enhanced from Monday. Petrol price was increased 33/34 paise per litre and diesel price was increased by 25/27 paise per litre.
According to the Indian Oil Corporation, with effect from 6 am on Monday, petrol was sold at Rs 76.57 per litre in Delhi while diesel retailed at Rs. 67.82 per litre.
Within eight days including Monday’s hike, petrol has is costlier by Rs. 1.94 per litre while diesel is dearer by Rs. 1.68 per litre in the National Capital Region.
As of 6 am, May 21, petrol prices were at Rs. 76.57 per litre in Delhi, Rs. 79.24 per litre in Kolkata, Rs. 84.4 per litre in Mumbai and Rs. 79.47 per litre in Chennai, according to Indian Oil. Diesel prices were at Rs. 67.82 per litre, Rs. 70.37 per litre, Rs. 72.21 per litre and Rs. 71.59 per litre respectively in the court metros.
It was potentially because of the Karnataka assembly elections that the price of petrol and diesel were not raised by the union government. Because of that delay, oil companies (OMCs) wanted to raise the price once the election got over. This time, the companies needed a hike of Rs. 4.6 per litre, or 6.2 per for petrol, and Rs. 3.8 per litre, or 5.8 per cent for diesel, according to brokerage Kotak Institutional Equities.
The government is keeping an eye on the price hike, said the Oil Minister Dharmendra Pradhan.
Following this fuel price hike. industry chamber FICCI published their statement where it said that it desires that fuel excise duties be reduced by the government as soon as possible. “At a time when the Indian economy is on a recovery path, rising oil prices are again posing a high risk to India’s economic growth trajectory,” FICCI said in the statement.
In the last few weeks, there has been a steady rise in the global crude oil prices along with the strengthen the dollar against the rupee. So far this year, the rupee has weakened by almost 6 per cent while the global crude prices are close to the highs its achieved in 2014. Experts attributed these two factors to be behind the steep and continuous rise of price of petrol diesel in domestic market in such a short period.
So far this year, petrol prices have been increased by Rs. 6.6 per litre in Delhi, Rs. 6.52 per litre in Kolkata, Rs. 6.53 per litre in Mumbai and Rs. 6.94 per litre in Chennai. And in the same period, the hike in diesel prices have been Rs. 8.18 per litre, Rs. 8.07 per litre, Rs. 8.94 per litre and Rs. 8.76 per litre respectively in the four metros.
The global crude oil prices and the rupee-dollar exchange rate determines the domestic prices of petroleum fuel at present. This system for adjustments in fuel price on a daily basis was initiated since June last year. More than 80 per cent of annual oil requirement of India is imported and hence this dependency on global prices.
(Adapted from NDTVProfit.com)