Marginal increase in petrol and diesel prices after some relief on Sunday

Petrol and diesel prices in Delhi saw a marginal hike on Monday. A litre of petrol was hiked by five paise and now costs ₹80.43 while diesel's per litre price saw an increase of 13 paise and now costs ₹80.53.

After almost three weeks of consecutive price hikes, there had been no revision in fuel prices on Sunday. While a relief for consumers, it was little consolation still because the rates of both fuels have been going up ever since oil marketing companies re-started daily price revisions from June 7 after an 83-day period of hiatus.

Fuel rates differ from state to state depending on the incidence of value-added tax (VAT) but these rates in Delhi have especially in focus because diesel prices zoomed past petrol for the first time ever here. Indian Oil Corp said it was due to the VAT imposed by the Delhi government, adding that prices are expected to rise further.

In Mumbai, a litre of petrol and diesel costs ₹87.19 and ₹78,83, respectively. In Kolkata, the two rates are ₹82.10 and ₹75.64, respectively. In Chennai, the figures are ₹83.63 and ₹77.72, respectively.

Globally, oil rates have steadily fallen forcing OPEC+ to cut back on production. A barrel of oil is trading around $38, far less than times just before Covid-19. This is unlikely to have an impact on fuel prices in India.

Analysts had already predicted fuel prices to continue surge till at least the end of June. Oil marketing companies are looking at cutting their losses and with fuel demand gradually returning to normal after falling by huge margins during the nation-wide lockdown to check the spread of Covid-19, the central and state governments too are looking at revenue generation from the taxes charged on the two fuels.

There have been demands to arrest the rising fuel prices and provide relief to the consumer. There have also been demands related to bringing the fuel prices under Goods and Services Tax (GST). Both appear unlikely in current times due to the need being felt for revenue generation.