Petrol, diesel prices hit record high as crude oil prices rebound; inflation concerns grow

Petrol prices in Delhi touched an all-time high of Rs 84.2 per litre after rising by 23 paise today. Earlier, the petrol price touched an all-time high of Rs 84 on October 4, 2018, in Delhi. Diesel prices, today, were also raised by 26 paise a litre, taking the price to Rs 74.38 a litre. While the petrol pieces are at a lifetime high in Delhi, diesel prices are at a record high in Mumbai at Rs 81.07. In Mumbai, petrol is being sold at Rs 90.83 a litre. The rise in fuel prices is another threat to the already high inflation in the country. 

Even as the retail fuel prices were not reduced when there was a sharp fall in the crude oil prices in the month of March 2020, the prices of petrol and diesel are on a rise as Brent crude prices are surging. Brent crude is trading above $54 a barrel on Thursday, which is its highest level since last February after OPEC+ members agreed to maintain production levels around their current amounts for both February and March. Another reason for a rise in crude prices is that Saudi Arabia voluntarily cut output below its quota, while Russia and Kazakhstan were allowed to raise production. 

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It is to be noted that the Brent crude prices had fallen below $20 per barrel in May 2020, which was less than half of the current level; however, the same was not reflected in the retail fuel prices. This is because the government had raised excise duty by Rs 13 per litre on petrol and by Rs 15 a litre on diesel in two instalments in March 2020 and May 2020. The government’s move was aimed at garnering an additional revenue of Rs 1.6 lakh crore when the other sources of revenue generation were not performing well amid the lockdown.