Gasoline and diesel prices in India simultaneously skyrocketed. This could be the reason why
Gasoline and diesel prices can go up as much as ₹12/liter in the coming days International crude oil rates have increased significantly in recent weeks.
Today will be a good day to raise the price of your car as numerous reports and indications suggest that gasoline and diesel prices could see a spike from Tuesday onwards. While petrol and diesel prices have remained flat as they have been in the past four months due to state elections in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur, these rates could now soar northward due to crude oil prices. boom in the international market.
In recent weeks, oil marketing companies have had to bear the brunt of the soaring international prices of crude oil due to the Russia-Ukraine conflict. And because domestic fuel prices have remained the same, the pain for OMCs is heavy. A report by ICICI Securities says that gasoline and diesel prices must rise more than ₹12 liters for breakeven OMCs. With the election on Monday and results to be announced on Thursday, fuel prices are likely to be on the rise now. “With the state elections coming up next week, we expect the daily fuel price hikes to start again on both gasoline and diesel. Pump prices have not changed since November”, JP Morgan reported last week.
Brent has recently risen to nearly $130 a barrel, up from around $77 at the start of the year. As India imports a large portion of its domestic fuel needs, these rate changes have a profound impact on the domestic exchange rate. But add to that a host of central and state taxes and levies that make up the bulk of what is ultimately charged to customers.
Gasoline and diesel prices remain remarkably high in India with a liter of petrol in Delhi costing ₹95.41. A diesel lire is in ₹86.67. In other major metropolitan cities such as Mumbai, Kolkata and Chennai, a liter of petrol is already in the triple digits and the expected increase could push this figure further.
Date of first publication: March 7, 2022, 02:51 PM IST
