Fuel prices at record high; Petrol breaches Rs 99/litre in Mumbai

Under the new found preference for revising fuel prices every alternate day, the Oil and marketing companies (OMCs) raised the pump prices of petrol and diesel yet again on Tuesday.

Accordingly, the price of petrol increased by 27 paise per litre to Rs 92.85 a litre in Delhi while diesel price increased a tad higher by 29 paise to Rs 83.51 a litre on Tuesday.

Across the country as well the petrol and diesel prices increased between 25-30 paise per litre on Tuesday but its actual retail prices varied depending on the level of local levies in respective states.

The OMCs are following the practice of changing petrol and fuel rates every alternate day rather than undertaking changes on a daily basis for past few days. Accordingly, the Tuesday's price hike came after there was no change on Monday.

Also, on Sunday while petrol and diesel prices were raised by 24 and 27 paise per litre respectively, there was no price revision on Saturday. Similarly, while fuel prices were raised on Friday, it remained unchanged on the previous day.

"It seems oil companies are giving a sense of relief to consumers as fuel prices are not being raised on a daily basis. But still prices are not actually falling but being raised on every alternate day too this month," said a oil sector expert not willing to be named.

He said that the practice of daily price revision, started after deregulation of petrol and diesel prices few years ago but had been done away with by OMCs for past several months giving clear indication that administrative price regime is still working for the sector.

Under daily price revision, OMCs revised petrol and diesel prices every morning benchmarking retail fuel prices to a 15-day rolling average of global refined products' prices and dollar exchange rate. However, in a market where fuel prices need to be increased successively, alternate day price revision seems to be the flavour.

It is worth noting that with 10 price increase in May, the retail price of regular petrol has already reached over Rs 99 a litre in Mumbai. Petrol prices are already over Rs 100 per litre in several cities in Madhya Pradesh, Rajasthan and Maharashtra. Premium petrol has been hovering above that level for some time now.

Petrol prices have increased by Rs 2.30 a litre in Delhi in May in the 10 increases so far. Similarly, diesel prices have risen by Rs 2.78 per litre in capital this month.

IANS had written earlier that OMCs may begin increasing the retail price of petrol and diesel post state elections as they were incurring losses to the tune of Rs 2-3 per litre by holding the price line despite higher global crude and product prices.

With global crude prices at around $69 a barrel mark, OMCs may have to revise fuel prices upwards again if there is any further firming up.

--IANS

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