scorecardresearch
Follow Us:
Tuesday, June 28, 2022

Explained: Why have petrol prices hit a record high?

Petrol price in the national capital hit an all-time high of Rs 84.2 per litre on Thursday. Why are prices higher despite lower crude oil prices?

Written by Karunjit Singh , Edited by Explained Desk | New Delhi |
Updated: January 7, 2021 2:28:21 pm
petrol price, petrol price in india, petrol price hike, petrol price today, petrol price today in india, petrol rate, petrol rate in india, petrol rate todayStaff at a petrol Pump in New Delhi. (Express Photo: Tashi Tobgyal, File)

Petrol price in the national capital hit an all-time high of Rs 84.2 per litre on Thursday after oil marketing companies hiked the price of petrol by 23 paise per litre. Diesel prices were also hiked by 24 paise to Rs 74.38 per litre. Oil marketing companies had also hiked the prices of petrol by 26 paise per litre and that of diesel by 25 paise per litre on Wednesday after holding prices constant for 30 days.

The price of petrol in Delhi 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 at $54 per barrel, its highest level since the crash in crude oil prices due to the Covid-19 pandemic in March. A decision by Saudi Arabia to cut crude oil output by one million barrels per day in February and March has also contributed to the hardening of crude oil prices.

Why are prices higher despite lower crude oil prices?

The key reasons behind the high prices of petrol and diesel despite relatively low crude oil prices are hikes in government levies over the past year.

Best of Express Premium
Rationalisation, reforms may test Centre-state relations at GST meetPremium
Clampdown and unclear policy prompt crypto exchange founders to leave IndiaPremium
Explained: What is the 2/3rds rule in anti-defection law?Premium
UPSC Key-June 27, 2022: Know the relevance of ‘Deputy Speaker’ to ‘Nation...Premium

The central government hiked the excise duty on petrol to Rs 32.98 per litre from Rs 19.98 per litre at the beginning of 2019, increased the excise duty on diesel to Rs 31.83 per litre from Rs 15.83 over the same period to boost government revenues as economic activity fell due to the pandemic.

A number of state governments also hiked value-added taxes to boost revenues which were hit by low economic activity due to Covid-19 related restriction on movement of goods and people.

Central and state levies currently account for about 62% of the retail price of petrol and around 57% of the retail price of diesel in the national capital.

Express Subscription Do not hit the wall, subscribe for the best coverage out of India starting at just $5 per month

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest Explained News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
0 Comment(s) *
* The moderation of comments is automated and not cleared manually by indianexpress.com.
Advertisement
Advertisement
Advertisement
Advertisement