Retail prices of petrol and diesel are struggling thanks to rising international oil rates and automobile fuel rates may even see an extra northward movement, two people working in several oil companies said on condition of anonymity

Diesel has become costlier by 70 paise a litre on Monday after state-run fuel retailers raised its rates by another 25 paise a litre, the third price hike of the fuel within the last four days as international petroleum prices head towards $80 a barrel on rising demand and provide concerns.

Pump prices of petrol, however, remain frozen at ₹101.19 per litre since September 5. Diesel prices, which had softened to ₹88.62 per litre three weeks ago after climbing to record ₹89.87 a litre in mid-July, are priced at ₹89.32 on Monday in Delhi.

Retail prices of petrol and diesel are struggling thanks to rising international oil rates and automobile fuel rates may even see an extra northward movement, two people working in several oil companies said, requesting anonymity.

Benchmark Brent crude continued an upward movement in intraday trade on Monday with a gain of 1.83% at $79.52 a barrel. it’s soared by over 10% from $72.22 per barrel three weeks ago. Last week, HT reported that fuel retailers would start raising fuel rates soon.Pump prices of petrol, however, remain frozen at ₹101.19 per litre since September 5. Diesel prices, which had softened to ₹88.62 per litre three weeks ago after climbing to record ₹89.87 a litre in mid-July, are priced at ₹89.32 on Monday in Delhi.

Retail prices of petrol and diesel are struggling thanks to rising international oil rates and automobile fuel rates may even see an extra northward movement, two people working in several oil companies said, requesting anonymity.

Benchmark Brent crude continued an upward movement in intraday trade on Monday with a gain of 1.83% at $79.52 a barrel. it’s soared by over 10% from $72.22 per barrel three weeks ago. Last week, HT reported that fuel retailers would start raising fuel rates soon.

After international oil prices dropped below $70 a barrel in mid-August, fuel retailers had began to cut fuel rates. Diesel prices were first reduced by 20 paise per litre on August 18 after it climbed to an all-time high of ₹89.87 a litre in mid-July and remained at that level for subsequent 34 days. Petrol prices were also reduced by 20 paise a litre for the primary time on August 22, after it maintained a record of ₹101.84 per litre in Delhi for 36 days.

Subsequently, several small price cuts made petrol and diesel cheaper by 65 paise a litre and ₹1.25 per litre, respectively, until their pump rates were frozen on September 5.

According to the people mentioned above, international petroleum prices rose on subdued US boring in sight of the Ida hurricane which tore through the Gulf of Mexico, and robust demand on optimism about global economic process .
Companies were holding prices, and expecting some tax relief from the govt in terms of GST [Goods and Services Tax] relief, but the proposal to incorporate petroleum products in GST was declined within the GST Council meeting on Citizenship Day , forcing companies to believe raising fuel rates” one person mentioned above, said.

International oil rates, which are often volatile, directly influence pump prices of petrol and diesel in India. Heavy a lot of Central and state taxes also are liable for astronomically high rates of the auto fuels.

Through 2020, as global crude prices plunged (below $20 a barrel in April last year), the central government raised excise duty on fuel to prop up its finances. States too followed suit as their revenues were hit on account of the Covid-19 pandemic. As a result, Central and state levies, combined, are over 50% of the retail prices of petrol and diesel.

According to official data, the petroleum sector contributed ₹371,726 crore Central excise revenue in 2020-21, and ₹202,937 crore state levies or VAT (VAT).

A further spike in auto fuel rates is predicted as international crude prices are again moving north and therefore the value of rupee is depreciating against the dollar. India imports quite 80% petroleum it processes and pays in dollars. In Delhi, Central levies account for over 32.5% of petrol’s price, and state taxes (VAT) 23.07%. On diesel, the Central excise is over 35.8% while VAT is quite 14.6%.