Diesel prices skyrocket in Indian metros on decreased supply from global market

petrol diesel price hike

When it comes to everyday life, be it for people or companies, the price of fuel can disrupt the flow of activities without warning.

The price of diesel scaled an all-time high in New Delhi on Tuesday when it hit Rs 59.14 per litre. It has been rising for some time now, in line with the increase in global crude oil prices, as supply from overseas markets thinned out over the last couple of months.

And India’s other metropolitan cities are not far behind. The price of diesel in Kolkata is currently at a 3-year high and in Mumbai and Chennai, it is the highest it has been since May and January, respectively.

On Monday, the price of petrol in Mumbai was Rs 79.94 a litre, the highest since August 2014, while that of diesel was Rs 62.75. In Kolkata, diesel cost Rs 61.73 a litre, while in Chennai it cost Rs 62.30 a litre.

Explainer: How Daily Revision Of Petrol, Diesel Prices Works

According to Petroleum Minister Dharmendra Pradhan, the recent surge in diesel and petrol prices is primarily due to an increase in international prices after two hurricanes – Harvey and Irma – resulted in a shutdown of 13 percent of the United States’ refinery capacity.

“Fuel prices have gone up recently due to the hurricane in the US. As the prices reduce in the international market, they will come down here also,” Pradhan had said.

Prices in Delhi alone have risen by as much as Rs 5.74 a litre since the US shutdown and people all over the country are up in arms about it. Pradhan tried pacifying disgruntled citizens by saying that the surge in prices of diesel and petrol are only transient and that they will ease soon, but this was just met with more scepticism.

However, market experts suggest that fuel prices are poised to come down now that the refineries in US have started operating again and Libya and Algeria are expected to increase supply in the coming weeks.

In a related development, India got its first shipment of US-produced crude oil on Monday at Odisha’s Paradip Port. This is one of the first shipments sent to India after the US stopped exporting crude in 1975.