Health Care

Petrol prices hit new high

Petrol prices hit new high

Petrol and diesel prices were hiked on Monday after a 19-day pre-Karnataka poll hiatus, bringing petrol prices in Delhi to a 56 month peak at Rs 74.80 per litre, and diesel prices to a new all-time high at Rs 66.14 a litre.

Oil PSUs, who had kept rates unchanged for almost three weeks before Karnataka went to polls despite input costs spiking, reverted to a daily revision of prices no sooner had the state voted to elect a new government on Saturday.

Last time, petrol and diesel prices were revised on April 24.

Oil marketing companies have estimated a loss of about ₹ 500 crore as they absorbed higher cost resulting from the spike in global oil rates and fall in rupee against the United States dollar. After adding excise duty and additional VAT, the price shoots up to around Rs 82.65 (Mumbai) and Rs 77.50 (Kolkata).

According to the ERC, the price of super petrol has gone up by 34 cents while that of diesel and kerosene went up by 78 cents and Sh1.50 per litre respectively in Nairobi.

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This development, which coincided with the run-up to the Karnataka assembly elections, has brought to the fore an evergreen debate: does the government continue to interfere in the pricing of petrol and diesel despite deregulation? The petrol price in the national capital is at six-year high. An update by Indian Oil Corporation said that the price of petrol went up by 18 paise in Kolkata and Chennai, while diesel prices have been raised by 21 paise a litre in Delhi, 5 paise in Kolkata, and 23 paise in Mumbai and Chennai. Heavy dependence on imports, geopolitical uncertainties and cartelization by OPEC nations are some of the reasons why crude oil prices and consequently fuel prices have been on an upward swing in recent months.

"The OMCs which sustained all the losses due to it, will now certainly try to recover their losses by increasing the oil prices" said Madan Sabnavis, Chief Economist at CARE Ratings.

Interestingly, Brent crude oil prices increased by about $3 (Rs 200) per barrel during the period when fuel prices in India remained unchanged. The prices surged both on May 14 and 15, resulting in petrol's net cost going up by 33 paise in Delhi, and diesel's by 44 paise.

The other two major state oil companies Hindustan PetroleumNSE 1.71 % and Bharat Petroleum followed suit.