New Delhi: Despite a decline in global crude oil prices, petrol and diesel rates in India have remained unchanged. As a result, petrol in Delhi continues to be priced at ₹94.72 per liter, while diesel remains at ₹87.62 per liter.
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No Change in Fuel Prices
According to the latest update on the Hindustan Petroleum Corporation Limited (HPCL) website, there has been no revision in fuel prices across the country. In Mumbai, petrol is priced at ₹104.21 per liter, while diesel stands at ₹92.15 per liter.
Global Crude Oil Prices Decline
On the international market, the price of U.S. crude oil dropped 0.97%, settling at $66.25 per barrel. Similarly, London Brent crude declined by 0.85%, reaching $69.96 per barrel.
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Fuel Prices in Major Metro Cities
| City | Petrol Price (₹/L) | Diesel Price (₹/L) |
|---|---|---|
| Delhi | 94.72 | 87.62 |
| Mumbai | 104.21 | 92.15 |
| Chennai | 100.75 | 92.34 |
| Kolkata | 103.94 | 90.76 |
| Hyderabad | 107.46 | 95.70 |
Despite fluctuations in the global crude oil market, fuel prices in India have remained steady, with no official announcement regarding any future changes.
Why Is Fuel Still Expensive in India While Crude Prices Are Falling?
Despite a decline in global crude oil prices, petrol and diesel rates in India remain high. Several factors contribute to this pricing trend, including high taxation, refinery costs, and government policies. Here’s a breakdown of why Indian consumers are not seeing an immediate reduction in fuel prices:
1. High Taxes on Fuel
- One of the main reasons fuel remains expensive in India is the heavy taxation by both central and state governments.
- The excise duty imposed by the central government and VAT (Value Added Tax) levied by state governments make up a significant portion of the final fuel price.
- Even if global crude prices decrease, taxes remain fixed or are adjusted minimally.
2. Oil Marketing Companies’ Pricing Strategy
- Fuel prices in India are set by Oil Marketing Companies (OMCs) such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum based on international crude oil rates, exchange rates, and refining costs.
- OMCs often delay passing on the benefit of lower crude prices to consumers to recover previous losses or maintain profit margins.
3. Rupee-Dollar Exchange Rate
- Crude oil is purchased in US dollars, and if the Indian rupee weakens against the dollar, import costs remain high.
- Even if crude prices drop, a weaker rupee offsets the potential benefit for Indian consumers.
4. Refining and Transportation Costs
- Crude oil needs to be refined before being sold as petrol or diesel. The refining process involves operational costs, which can fluctuate.
- Transportation and distribution expenses also add to the final price, varying from state to state.
5. Government Revenue Considerations
- Fuel taxes are a major source of revenue for both the central and state governments.
- Governments often hesitate to cut fuel prices significantly as it would reduce tax collections, impacting public welfare schemes and development projects.
6. Dynamic Pricing Mechanism
- India follows a dynamic pricing model, where fuel prices are revised daily based on international oil prices and other factors.
- However, reductions are not always passed on immediately, as OMCs adjust prices cautiously to avoid financial losses.
Will Fuel Prices Drop Soon?
- Unless the government reduces taxes or OMCs pass on the full benefit of cheaper crude oil, significant price cuts are unlikely in the near future.
- Any decision on lowering fuel prices will depend on global oil market trends, currency fluctuations, and domestic fiscal policies.
Despite falling crude prices, multiple economic and policy-related factors keep petrol and diesel expensive in India. Unless there is a major intervention, consumers will have to bear the burden of high fuel costs.