Diesel and petrol prices have hit record high again, for the second consecutive day across the country on Thursday, October 21, 2021.
Petrol touching Rs 106.54 per liter while diesel is available for Rs 95.27 per liter in Delhi, and petrol is retailing at Rs 112.44 per liter while diesel for Rs 103.26 per liter in Mumbai, data available on Indian Oil Corporation’s website showed.
The retail price of fuel in India is based on crude oil prices internationally, as well as central and state taxes on the refined product. When international crude prices fall, even high taxes on fuel are noticed at retail level but when crude prices rise, and if taxes remain high, then retail prices shoot up.
Higher global crude prices are not alone responsible for high fuel prices, Cost to the dealer which includes Crude oil price in global markets, Exchange rate, refining costs, Excise duty charged on per unit basis by the Centre, Dealer commission to the fuel station,VAT imposed by the state comprises fuel price.
In the global market, oil prices were mixed on Thursday, paring earlier gains, as some investors scooped up profits from the recent rally while solid demand in the United States and a switch to fuel oil from coal and gas amid surging prices underpinned market sentiment, news agency Reuters reported.
|City||Petrol (Rs/litre)||Diesel (Rs/litre)|
|Source: Indian Oil Corporation|
Brent crude, futures fell 11 cents (0.1 per cent) to $85.71 a barrel at 0355 GMT, reversing earlier gains that took the benchmark to the highest since October 2018. It rose 0.9 per cent the previous day. US West Texas Intermediate (WTI) crude futures for December rose 5 cents (0.1 per cent) to $83.47 a barrel. November WTI crude, which expired on Wednesday, settled up 91 cents, or 1.1 per cent, after touching the highest since October 2014 earlier in the session, the report said.
The economics behind the petrol price determination is complex and the tax rules at Centre and States are very different with fuel currently being out of the GST framework.
As the RBI governor recently urged, it is time for both the Centre and states to rationalize their taxes to give relief to the consumers.
Sources: Financial Express, The Indian Express