Petrol prices continue to scale higher, selling at record ₹84.70/litre in NCR

NEW DELHI: Domestic petrol prices have continued to scale higher, with oil marketing companies raising prices again on Thursday. The fuel sold for ₹84.70 a litre--an all-time high--in the national capital.

Retail prices of petrol and diesel were raised by 25 paise per litre on Thursday. Diesel sold for ₹74.88 per litre in Delhi.

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Petrol prices in Delhi in the new year so far have risen by 99 paise per litre, including today's increase. The previous all-time high was ₹84.45 per litre hit on 13 January. Prior to the recent increases, on 4 October, 2018, petrol prices had surged to as much as ₹84 a litre.

Diesel prices had touched a record high of ₹81.94 a litre on 30 July, 2020.

Higher fuel prices come in the backdrop of rising global crude oil prices and positive news on coronavirus vaccines. India is prone to price and supply risks. Benchmark Brent crude price eased in early deals on Thursday, trading at $55.96 per barrel, but was still sharply up from $18.38 a barrel seen in April when several nations had announced lockdowns to curb the pandemic. The West Texas Intermediate was also down, trading at $52.82 a barrel at the time of writing this story.

There is a growing clamour for the Indian government to cut taxes on fuel. In 2020-21, India, the world’s third-largest oil importer, raised taxes on petrol and diesel by ₹13 and ₹16, respectively, in two tranches, through a special additional excise duty and the additional excise duty, collected as road and infrastructure cess.

The cost of the Indian basket of crude, which comprises Oman, Dubai and Brent crude, was $55.76 a barrel on 12 January. It averaged $56.43, $69.88 and $60.47 per barrel in FY18, FY19 and FY20, respectively. With the spread of the pandemic, the price fell to $19.90 in April, $30.60 in May, $40.63 in June, $43.35 in July, $44.19 in August, $41.35 in September, $40.66 in October, $43.34 in November and $49.84 a barrel in December respectively, according to data from the Petroleum Planning and Analysis Cell.

Also, oil prices have been on an upswing after the13th meeting of the Organization of the Petroleum Exporting Countries (Opec)-plus for “adjustments to the production level for February and March 2021.”

Any increase in global oil prices can affect India’s import bill, stoke inflation and increase its trade deficit. The country spent $101.4 billion on crude oil imports in 2019-20 and $111.9 billion in 2018-19. It is a key refining hub in Asia, with an installed capacity of over 249.36 million tonnes per annum (mtpa). It has 23 refineries and plans to grow its refining capacity to 400 mtpa by 2025.