Even as the IPL cricket tournament is underway in Dubai and some batsmen are hitting centuries, the soaring price of diesel is all set to hit a century of its own. Today’s price hike of 37 paise takes the price of a diesel litre to Rs 99.17 in Mumbai, up from the Rs 98.80 on October 5. In a span of six days, diesel has become costlier by Rs 1.33 a litre or averaging 22 paise a day.
So, it could be surmised if the current ‘run’ rate continues, diesel should cross the Rs 100-a-litre mark by October 10, making Mumbai the first metro to hit a diesel century. In fact, in Amravati, diesel has already hit the ‘century’. Mumbai was also the first of the four metro cities to cross the Rs 100-a-petrol-litre on July 13 this year. The Rs 100-a-litre mark for diesel is still some distance away in Delhi (Rs 91.42), Chennai (Rs 95.93) and Kolkata (Rs 94.53). See price data table below.
Meanwhile, those tanking up on petrol are not spared the hike either. In Mumbai, the price of a petrol litre rose by 29 paise to Rs 108.96 today. The price increase over the first six days of October is Rs 1.01 per litre, less than what it has been for diesel.
While the ongoing increase is the result of global crude oil prices hitting a seven-year high, it is also a fact that in India, motorists never really benefitted when crude oil prices had plummeted in early 2020. Today’s Brent crude price is $82.68 a barrel, the highest since 2014. And from the looks of it, global prices are not likely to cool down anytime soon.
Highly taxed fuels
Last month the GST Council did not take any decision to bring these fuels under its purview. Which means that motorists will continue to pay wallet-busting prices to run their vehicles, unless they are using CNG or have made the shift to electric.
The current taxes – Central and State – typically account for around 55% of a petrol litre and 50% of a diesel litre. In FY2021, the Centre got Rs 334,894 crore excise duty from petrol and diesel. For both the Centre and financially fragile states, petrol and diesel account for a significant part of their revenue streams. While everyone is busy mopping up revenue during a difficult Covid period, it is the customer who is suffering silently.
There is also the case of the government – both Centre and States –aggressively driving the adoption of electric vehicles and electric mobility. While a number of states including Delhi, Maharashtra, Tamil Nadu, Telagana, Rajasthan, Assam and Kerala have introduced subsidy and incentive-laden EV policies, the government's recently announced PLI Scheme for India Auto Inc with an outlay of Rs 26,058 crore has given a huge fillip to the EV industry.