Petrol prices reached an all-time high of Rs 84.2 per litre in the Capital on Thursday, after oil marketing companies (OMCs) hiked rates by 23 paise per litre. Diesel prices were raised by 24 paise to Rs 74.38 per litre. OMCs had also hiked prices of petrol by 26 paise per litre and that of diesel by 25 paise per litre on Wednesday, after holding for 30 days. A steady increase in international prices of crude oil and high taxes on petrol and diesel to shore up government revenues are the key reasons behind the recent hike.
The price of petrol in Delhi had previously hit the Rs 84 per litre-mark in October 2018 when international crude prices were above $80 per barrel. Brent crude is currently priced around $54 per barrel — its highest level since the crash in prices due to the pandemic in March.
The average cost of India’s crude basket in this fiscal has been around $39 per barrel, hitting lows of $19.9 per barrel in April and a high of $49.8 per barrel in December. The average cost of the Indian crude basket in FY19 was $69.9 per barrel in $60.5 per barrel in FY20.
The key reasons behind the high prices of petrol and diesel, despite relatively low crude oil pieces, are hikes in government levies over the past year. The central government has hiked the excise duty on petrol to Rs 32.98 per litre from Rs 19.98 per litre at the beginning of 2019, and increased the excise duty on diesel to Rs 31.83 per litre from Rs 15.83 over the same period. A number of states also hiked value-added taxes. Central and state levies currently account for about 62 per cent of the retail price of petrol and around 57 per cent of the retail price of diesel in the national capital.
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