With crude oil prices hovering around the $40 a barrel mark, almost double from last month’s rates, state-run oil marketing companies today hiked the price of petrol and diesel for the fifth consecutive day. The price of both petrol and diesel went up by 60 paise a litre each today. During the last five days, the price of petrol has gone up by ₹2.74 a litre and that of diesel by ₹2.83 a litre in New Delhi.
Amid the situation arising out of the coronavirus related lockdown, hike in excise duties and a fall in demand, retailers had chosen not to revise prices for more than 80 days since mid-March. With the phase-wise reopening of the economy under ‘Unlock 1.0’ or ‘lockdown 5.0’, fuel demand started to increase gradually as economic activities started picking up. India’s largest refiner Indian Oil Corporation Ltd (IOC) said consumption of all petroleum products put together almost doubled last month as compared to April 2020 levels.
Amid estimates that the recovery of oil demand could be delayed with the increase in coronavirus cases, Brent crude futures fell 2.2%, or 92 cents, to $40.81 a barrel today. A spike in US inventories also contributed to the fall.
Fuel rates in India, which had been on the declining mode before the lockdown began due to a bear phase in the crude oil market, are now at its highest level in the last four-and-a-half months. Since March, the central government has increased excise duty twice on both the fuels. Even most state governments have hiked cess or VAT on their part. As a result, almost 70% of the retail price of petrol and diesel is now nothing but tax.