Prices of petrol and diesel have hit their highest yet in India and show no signs of slowing down. This, even as the country and its citizenry battle the pandemic, an economic slowdown, salary cuts and job losses. Today’s price hike has taken the price of petrol in Mumbai to Rs 98.12 a litre – just Rs 1.88 shy of the Rs 100-a-litre mark. Considering that the past week (May 5 to May 11) has seen petrol price increase by Rs 1 a litre, the Rs 100 mark should be crossed by the end of May, if not earlier.
But those who tank up on diesel, particularly commercial vehicle operators, are hit harder than their petrol-using brethren. That’s because the hike in diesel prices in the past week is more than petrol. In Mumbai, diesel costs Rs 89.48 a litre, having risen by Rs 1.29 a litre in the past seven days.
Petrol price up by 30%, diesel by 37% in 13 months
A quick data analysis of the continuing petrol and diesel price increase since April 1, 2020 – which is also when the BS VI era kicked in – reveals the extent to which fuel prices have risen.
In the past 13 months, petrol and diesel prices have jumped massively. The price data table above reveals just how much more motorists in Mumbai, Delhi, Chennai and Kolkata are paying to travel the same distance. from April 1, 2020 when the BS VI emissions mandate kicked in, petrol price has risen by Rs 22.84 a litre and diesel by Rs 24.29 a litre.
The petrol-diesel price differential of Rs 10.09 per litre on April 1, 2020, is today down to Rs 8.64 a litre, indicating the speedier price rise in diesel, which is the fuel used by scores of commercial vehicles crisscrossing the country and transporting essential goods and at present life-saving oxygen cylinders.
Taxes make up for over 61% of retail petrol price and 56% of diesel. The retail price of the two fuels is made up of three components – base price that reflects the cost of international oil, central excise duty and state taxes. Both Central and State governments rely heavily on collections from taxes on these products for meeting their developmental and welfare priorities.
Much more money to travel the same distance
These wallet-busting fuel prices are hitting the Indian motorist – on two-, four and more wheels – very hard. For instance, the owner of a fuel-sipping commuter motorcycle like the Hero Splendor, which has an 11-litre tank, would have paid Rs 828 to tank up on April 1, 2020 in Mumbai. Today, he pays Rs 1,079.32 – which is Rs 251.32 more – to go the same distance.
When it comes to cars, a Mumbai-based owner of a petrol-engined Maruti Wagon R which has a 35-litre fuel tank, will today pay Rs 3,434.20 to tank up compared to Rs 2,634.80 on April 1, 2020 – a sizeable difference of Rs 799.40. Meanwhile, to tank up his/her Hyundai Creta Diesel, which has a 50-litre fuel tank, the user will have to fork out Rs 4,474 today in Mumbai, compared to Rs 3,259.50 barely 13 months ago on April 1, 2020 – a marked difference of Rs 1,214.50.
In the case of commercial vehicles, the unabated price increase for diesel would be hitting their profitability hard. The TCO – Total Cost Of Ownership – formula is being hit out of the window. Already badly impacted by the Covid-induced downturn and lack of business, owners of medium and heavy commercial vehicles (M&HCVs) or even small CVs will be compelled to rejig their business models. For instance, a 37-tonner Tata truck like the LPT 3718 has a 400-litre tank. In April 2020, a full tank of diesel would have cost the owner Rs 26,076 in Mumbai. Now, in May 2021, he has to pay Rs 35,792 for the same quantity of diesel – Rs 9,716 more – each time the truck is tanked up, which is often considering the amount of time most trucks are plying.
Global crude prices moving north
The continuing steep price rise of petrol and diesel is a direct impact of the marked rise in global crude oil prices, which in turn is a result of major global economies like the US and China swinging back into work mode after the impact of the pandemic.
Today’s Brent crude oil price of US $68.24 a barrel, up 271% than the $18.38 a barrel on April 1, 2020 when Covid-19 was peaking and transport and shipping operations worldwide were either in lockdown mode or minimal. However, the hapless Indian motorist never benefited from the record low prices of global crude oil either. Will there be a price cut soon? Not likely.