On Sunday, the price of petrol increased by 50 paise per liter and diesel by 55 paise, bringing the total increase in tariffs since the daily price review resumed less than a week to Rs 3.70-3 .75 a liter.
Petrol in Delhi will now cost 99.11 rupees per liter from 98.61 rupees previously, while diesel tariffs have risen from 89.87 rupees per liter to 90.42 rupees, according to a price notification from fuel retailers of State.
Rates have been increased nationwide and vary from state to state depending on the incidence of local taxation.
This is the fifth price increase since a long four-and-a-half-month hiatus in rate reviews ended on March 22. On the previous four occasions, prices had been raised by 80 paise a liter – the biggest one-day rise since the introduction of the daily price review in June 2017.
In total, petrol prices rose by Rs 3.70 per liter and diesel by Rs 3.75 in six days.
Prices had been frozen since Nov. 4 ahead of parliamentary elections in states like Uttar Pradesh and Punjab, a period during which the cost of raw materials (crude oil) soared by around $30 a barrel.
The rate review was expected soon after the votes were counted on March 10, but it was postponed for a few weeks, apparently not to give opposition leaders like Rahul Gandhi the chance to say they had rightly predicted that prices would rise after the election.
Congress and other opposition parties have criticized the government for the price hike, saying it has increased the burden on the common man reeling from the general rise in commodity prices.
The retail price increase justified by the rise in crude oil prices during the 137-day pause from around $82 a barrel to $120 is huge, but state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are passing on the required increase in stages.
Moody’s Investors Services said last week that state retailers together lost about $2.25 billion (Rs 19,000 crore) in revenue for holding down petrol and diesel prices during the election period.
Oil companies “will have to raise diesel prices from Rs 13.1 to Rs 24.9 per liter and from Rs 10.6 to Rs 22.3 per liter of petrol (gasoline) at an underlying gross price of Rs 100 to Rs 120 dollars per barrel,” according to Kotak Institutional Equities.
CRISIL Research said a retail price increase of Rs 9-12 per liter will be required for full pass-through of an average of US$100 per barrel of crude oil and Rs 15-20 per liter if the average price of crude oil is 110 USD. -120.
India is 85% dependent on imports to meet its oil needs and retail tariffs therefore adjust according to global movement.