Petrol, diesel prices raised by 80 paise a litre, first hike in 137 days

The government cut excise duty on petrol by Rs 5 per litre and that on diesel by Rs 10 a litre on November 3 to give relief to consumers battered by record-high retail fuel prices. (Representative image)

Petrol and diesel prices were raised by over 80 paise a litre on March 22 after a status quo on rates for 137 days.

Petrol will now cost Rs 96.21 per litre in Delhi, while you shall have to pay Rs 87.47 per litre for diesel. In Mumbai, petrol will now cost Rs 110.78, while diesel would cost Rs 94.94 per litre.

This was the first fuel price hike since November 2, 2021. On November 4th, the government announced an Rs 5 per litre cut in excise duty on petrol and an Rs 10 per litre cut in excise duty on diesel to provide relief to customers and cushion them against the soaring international crude oil prices. Subsequently, many states followed suit and cut taxes. Since then, crude oil prices have shot up over 40 percent but oil marketing companies (OMCs) left the retail prices unchanged.

Cooking gas prices too were raised the same day. Domestic LPG cylinder prices have been hiked by over Rs 50 in Delhi, Mumbai and other cities with effect from March 22. The government raised the bulk diesel prices by Rs 25 a litre last week and aviation fuel is up 50 percent since January.

The price hike was much-anticipated after the election results were out, on March 10, however, in the light of the second half of the Budget Session, the measure may have been delayed. The latest price hike implies consumers will have to pay more for fuel, but still, the increase is less than 1 percent of the per litre price that is prevalent right now.

In the international markets, crude oil prices have gone past $100 a barrel fuelled by the Russian invasion of Ukraine. Oil prices touched a high of close to $140 per barrel, over the supply uncertainties over the Ukraine crisis. India is world's third largest consumer of oil, and over 85 percent of the requirement is met from imports.

Moneycontrol had earlier spoken to experts, industry executives and petrol pump dealers who had predicted that retail prices of petrol and diesel could be increased in the range of Rs 6-10 a litre gradually.

While industry expects OMCs to further increase the retail prices for fuel, they hope that the government will step in with a tax cut like they did in November. The duty and taxes account for 40-50 percent of the price, and are a major source of revenue for the Centre and state governments. The government will walk a tightrope as a cut would give relief to consumers but it will lead to a loss of revenue for the government.