Fuel price hiked again, 3rd increase in 10 days:Petrol up by 87 paise /litre, diesel costlier by 91 paise /litre

Petrol prices have been hiked by 87 paise per litre, and diesel prices by 91 paise per litre. This is the third increase in rates in less than 10 days, PTI reported on Saturday. In Delhi, the petrol price rose from ₹98.64 to ₹99.51 per litre. Similarly, diesel rates have gone up by 91 paise from Rs 91.58 to Rs 92.49. A similar price hike was observed on Tuesday. At that time, the prices of petrol were raised by 87 paise per litre, and the prices of diesel were raised by 91 paise per litre. Continuous fuel price hike Since May 15, state-owned oil companies have started passing on the elevated energy prices arising from the West Asia conflict in a calibrated manner. Prices were hiked by ₹3 a litre on May 15, followed by a 90 paise increase on May 19. In all, rates have gone up by almost Rs 5 per litre. Prices of other goods may also increase… Freight costs will rise: Transportation costs of goods could increase, making vegetables, fruits, and groceries from other states more expensive. Higher farming costs: Farmers will have to spend more on running tractors and pumping sets, which will increase the cost of grains. Bus and auto fares: Public transport and school bus fares may also see an increase. Why did petrol and diesel prices increase? The main reason behind this hike is the fluctuation in crude oil prices in the international market. Before the West Asia conflict began, crude oil prices were around $70 per barrel, but they have now risen to over $100 per barrel. With crude prices increasing, oil companies were under pressure. Therefore, the companies have taken this step to recover their losses. If crude oil prices continue to remain high for a long period, petrol and diesel prices may be increased further. Price rises up to 4 times due to base price change Fuel prices in India are decided on the basis of international crude oil prices and the value of the rupee against the dollar. Government oil companies update new rates every day at 6 AM under the “daily price revision” or dynamic pricing system. Before fuel reaches consumers, several taxes and costs are added to the original price. This can be understood in simple terms: Crude oil price (Base Price): India imports nearly 90% of its crude oil requirement from foreign countries. The per-litre price of fuel is determined according to the price of crude oil purchased in the international market. Refining and company charges: Crude oil is processed in Indian refineries to produce petrol and diesel. This includes refining costs and the profit margin of oil companies. Central government excise duty: After refining, the central government imposes excise duty and road cess on fuel. These charges are the same across all states in the country. Dealer commission: Oil companies sell fuel to petrol pump owners (dealers) at a fixed rate, which includes a set dealer commission. This commission differs for petrol and diesel. State government VAT: Finally, state governments impose VAT or local sales tax according to their own rates. Since VAT rates differ from state to state, fuel prices also vary across cities like Delhi, Mumbai, Kolkata, and Chennai. Prices had not changed since 2024 Petrol and diesel prices in the country had remained stable since March 2024. Just before the 2024 Lok Sabha elections, the government reduced fuel prices by ₹2 per litre to provide relief to the public. Technically, fuel prices in India are deregulated, and companies can change rates daily based on the 15-day average price of international crude oil. However, due to political sensitivity, prices were not revised for a long period. Oil companies were reportedly losing ₹30,000 crore every month According to the government, state-run companies such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum were facing losses because of high crude oil prices in the international market. According to Petroleum Ministry Joint Secretary Sujata Sharma, these companies were suffering losses of around ₹30,000 crore every month from the sale of petrol, diesel, and LPG. Excise duty on petrol and diesel was reduced by ₹10 each Earlier, the government had reduced the special excise duty on petrol and diesel by ₹10 per litre each to keep fuel prices stable. The duty on petrol was cut from ₹13 per litre to ₹3, while the duty on diesel was reduced from ₹10 to zero. The central government earlier collected a total excise duty of ₹21.90 per litre on petrol. After the reduction in the special additional excise duty, it came down to ₹11.90 per litre. Similarly, the total central excise duty on one litre of diesel fell from ₹17.80 to ₹7.80 per litre.