Fuel prices were revised across the country for the fourth straight day on Friday, as the state-run Oil Marketing Companies (OMC) hiked petrol and diesel prices by 29 and 38 paise per litre respectively. In Delhi, the price of petrol was hiked by 29 paise from ₹ 87.85 to ₹ 88.14, and diesel was increased by 35 paise from ₹ 77.03 per litre to ₹ 78.38 per litre, according to Indian Oil Corporation, the country’s largest fuel retailer.
Meanwhile, in Mumbai, the revised petrol and diesel rates stood at ₹ 94.64 per litre and ₹ 85.32 per litre respectively. Currently, the fuel rates are the highest in Mumbai out of all the four metros.
Petrol and diesel rates have recorded an upswing since January 6, 2021, after staying unchanged for almost a month. The fuel rates have increased amid a rally in global crude oil prices, with COVID-19 vaccination drives beginning across the world.
How Fuel Prices are Determined?
Petrol and diesel prices may vary from state to state, due to various taxes levied by the central government and the state government concerned. In Delhi, for example, the Centre makes up for ₹32.98 per litre of the price of petrol, while the sales tax or Value Added Tax (VAT) of the local government constitutes ₹19.55. The corresponding amounts for diesel meanwhile are ₹31.83 and ₹10.99 respectively.
The practice of daily revision of fuel prices has been in effect since June 2017, before which the OMCs used to revise the prices every fortnight. In India, companies like the Indian Oil Corporation (IOC), Hindustan Petroleum (HP), and Bharat Petroleum (BP) determine petrol and diesel prices. This is done on the basis of fuel prices globally; if international prices rise, those in India rise too, while if the rates fall internationally, a similar effect is witnessed in India.
How Global Benchmarks Affect the Prices of Petrol and Diesel?
Oil marketing companies – Bharat Petroleum, Indian Oil Corporation, as well as Hindustan Petroleum align the prices of domestic fuel with the global benchmarks, by taking into account any changes in the foreign exchange rates. Any changes in fuel prices are implemented with effect from 6 am every day.
Meanwhile, in the early trade session today, Brent crude futures, the global oil benchmark, fell 0.62 percent to $ 60.76 per barrel. The domestic unit rupee gained 10 paise to 72.77 against the US dollar.
On Thursday, February 12, Brent crude futures, the global oil benchmark, fell 0.70 percent to $ 61.04 per barrel. The rupee slipped marginally lower by three paise to close at ₹ 72.87 against the American currency yesterday.