Petrol, diesel retail prices raised by 80 paise in 2nd straight hike after 137-day freeze

Petrol and diesel prices were raised by around 80 paise a litre for the second straight day on March 23.

The oil marketing companies (OMCs) increased the petrol retail price by 75 paise a litre and diesel by 76 paise, sources told Moneycontrol. In two days, the price of retail fuel rates have gone up by close to Rs 1.80 a litre each.

State run oil marketing companies (OMC) - Indian Oil, Bharat Petroleum and Hindustan Petroleum - can revise retail petrol and diesel prices daily, based on the rolling average of international benchmark prices over the past 15 days.

While prices of fuel sold to bulk consumers and aviation turbine fuel were raised, retail prices of petrol and diesel were left unchanged for almost 137 days even though crude oil prices had increased close to 45 percent during this period.

Petrol will now cost Rs 97.01 per litre in Delhi, while diesel will cost Rs 88.27 per litre. In Mumbai, retail petrol will now cost Rs 111.67, while diesel would cost Rs 95.79 per litre. The revised rates came into effect from 6am on March 23.

The increase announced on March 22 was the first since November 2, 2021. On November 4, the government announced an excise duty cut of  Rs 5 a litre in petrol and Rs 10 a litre in diesel to provide relief to customers and cushion them against the soaring international crude oil prices. Many states toed the line to lower levies on fuels. Since then, crude oil prices have soared but OMCs left the retail prices unchanged.

Brent crude futures surged to $139.13 a barrel on March 7, 2022 – the highest since July 2008 – driven by concerns over the Ukraine crisis and potential supply constraints because of sanctions on Russian oil. While crude prices have eased to about $118 now, there is still a lot of pressure on the margin for the OMCs given the price freeze earlier.

The price of bulk diesel has now surpassed the retail price by about Rs 25 a litre, indicating the extent to which they could be revised. But experts pointed out that the entire increase may not be passed on to consumers and the price rise would be gradual. The government may also consider tax cut going ahead.