NEW DELHI : Oil marketing companies (OMC) have hiked petrol and diesel prices in India for the 16th day in a row. Petrol price was hiked by 33 paise per litre and diesel by 58 paise to take retail rates to record high as the oil companies increased prices for the 16th day in a row.
Petrol price in Delhi was hiked to Rs 79.56 per litre from Rs 79.23 while diesel rates were increased to Rs 78.55 a litre from Rs 78.27, according to a price notification of state oil marketing companies.
In 16 days, petrol price has been hiked by Rs8.3 per litre and diesel by RS 9.46 – a record increase in rates of the fuel in any fortnight since pricing was deregulated in April 2002.
With this, the difference between a litre of petrol and diesel is just Rs 1.01. It is also worth noting that diesel prices in India today touched a new all-time high. Diesel prices in Delhi had attained a new high on 17 June, 2020, when it was retailed at RS 75.79 per litre, making it 10 paise costlier than 16 October, 2018, when it cost RS 75.69 for a litre.
Oil companies have been daily revising fuel prices since 7 June to compensate for the loss incurred during the nationwide lockdown. The lockdown came into effect on 25 March and remained in place for 82 days, during which the demand for fuel plummetted because of several travelling restrictions.
Increasing fuel prices are also likely to result in inflation as logistic and transportation cost related to essential items will increase. This is certainly going to burn a hole in the common man’s pocket, especially when the pandemic has dealt a severe blow to the economy. Increasing petrol and diesel prices will also become an impediment for increasing personal mobility in India.
But now that the demand for fuel in India is picking up because of Unlock 1.0, the companies have started offsetting that loss by making fuel expensive on a daily basis. As a matter of fact, OMCs have hiked petrol price by RS 8.3 per litre while diesel is costlier by RS 9.46 per litre in the last 16 days.
The increasing prices are going to mar vehicle sales in India and make situations worse for the automakers. The carmakers were already battling a severe sales slowdown since end-2018 and then COVID-19 dealt a blow to the sales. But now, the soaring fuel prices are soon to become a big cause of worry for the automobile companies, especially those manufacturing diesel vehicles.
Diesel vehicle sales in India has already dropped substantially because of BS6 induced price hike. In fact, some companies, including Maruti Suzuki, have phased out diesel products from their portfolio because of the lack of economic viability. And with the difference between petrol and diesel narrowing down to mere ₹1.01 per litre (in Delhi), the road ahead for diesel vehicles looks all the more difficult.
The corona virus pandemic has brought social distancing to the forefront, because of which many people are now wary of travelling in public transport systems and using shared mobility. Instead, they are willing to opt for personal vehicles for their regular travelling. But the steep price hike since 7 June is going to impact new vehicle sales in the country.
The biggest reason behind the steepest fortnightly fuel price hike in India is the increased excise duties on the fuel. Last month, the central government increased the excise duty on a litre of petrol and diesel by Rs 10 and Rs 13, respectively. Initially, the OMC refrained from increasing the fuel prices, largely due to low demand in the country.
(With Agency Inputs ).
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