Why are petrol, diesel, LPG prices rising again
Petrol, diesel stayed stable in India for four months
Meanwhile, global fuel prices saw a big rise
LPG cylinder prices rose by Rs 50
Petrol, diesel and LPG prices in India rose on Tuesday after a stretch of over four months. Petrol and diesel prices rose roughly Rs 0.8 per litre while the cost of an LPG cylinder rose by Rs 50. Petrol in Indian capital New Delhi now costs Rs 96.21 per litre while diesel costs Rs 87.47 per litre.
The price rise comes after oil marketing companies (OMCs) announced a hike after a straight 137 days. Typically, OMCs revise prices daily along a 15-day rolling average. However, this time, the companies held still amid a global rise in fuel prices due to the Russia-Ukraine conflict.
When the OMCs last revised prices on November 4, 2021, Brent crude was going at $81.6 per barrel. Now, Brent crude price has gone up 45% to $118.6 per barrel. The price rise was bound to come to India as the country imports nearly 85% of its crude oil needs. Prices are expected to go up further.
Why were fuel prices stable for four months?
On November 4, the central government announced a Rs 5 cut on excise duty for petrol and a Rs 10 cut on excise duty for diesel. The cut, according to political observers, was a response to criticism over rising inflation.
Within this four months, five Indian states went to polls – Uttar Pradesh, Punjab, Goa, Uttarakhand and Manipur. At the polls, the BJP returned to power in four out of the five states, Punjab excluded.
How high will prices go?
Petrol and diesel prices have to be raised Rs 0.52 for every $1 rise in crude oil price if OMCs are to maintain their marketing margins, say experts cited by The Indian Express. Since the last revision, crude price has increased by $37 per barrel. In order to keep their marketing margins, the same. OMCs will need to raise prices by Rs 19 per litre.