Petrol crosses Rs 100 a litre in Delhi, joins Mumbai, Chennai and Kolkata

by Ajit Dalvi 07 Jul 2021


The unabated price rise in the price of fossil fuels continues. The latest update is that petrol has crossed the Rs 100-a-litre mark in the capital city. A motorist in Delhi will today tank up on petrol at Rs 100.21 a litre.

With this, Delhi joins key metro cities Mumbai (Rs 106.25), Chennai (101.06) and Kolkata (Rs 100.23) which have all crossed the Rs 100-a-petrol-litre mark. Delhi notches this new ‘milestone’ 41 days after Mumbai crossed it on May 29, 2021.

Look at the petrol price data table above and you can see that in a span of seven days (July 1-7), motorists in these four metro cities are paying up to Rs 1.59 more for a litre. Stretch that math to 15 months ago and you can see how much more motorists are paying for petrol – the fuel is Rs 30.97 more expensive per litre for vehicle users in Mumbai.

Meanwhile, diesel too is getting its ‘share’ of price hikes albeit the rate of increase has dropped sharply in the past fortnight or so. The price increase in diesel, compared to petrol, over the past week is well under a rupee. A look at the diesel price increase table reveals that the increase is most for the motorist in Kolkata (0.47 paise).

Of the four metros, the Mumbai motorist is hit the most because he/she pays the highest price for both petrol (Rs 106.25) and diesel (97.09).

Living with regular price increases and highly taxed fuels
The fuel price increases in the first week of July come on the back of 16 prices hikes in June – the same as in May 2021 – which have increased the price of petrol in Mumbai by Rs 4.18 a litre and that of diesel by Rs 4.03 a litre. Fuel prices have been on a constant surge since May after oil marketing companies (OMCs) resumed their price increases on May 4.

One of the reasons for the wallet-busting fuel prices is the high level of Central and State taxes. For instance, in Delhi, on July 1, 2021, 33.29% (Rs 32.90) of the price of petrol litre (Rs 98.81) is accounted for by excise duty. Add 23.07% VAT (Rs 22.80) to that and what you get is 56.36% (Rs 55.70) of petrol price being tax. That’s what consumers will pay as tax when they tank on petrol in Delhi.

It’s the same wallet-busting story with diesel but with a slight difference. Excise duty is more percentage-wise – 35.65% (Rs 31.80) while VAT in Delhi is 14.62% (Rs 13.04) of the retail price of Rs 89.18 a litre. Add excise duty and VAT – Rs 44.84 – and they make up 50.28% of the final retail selling price of diesel in Delhi on July 1: Rs 89.18 a litre.

Data for the price build-up of petrol in Delhi reveals that over a month (June 1 to July 1), the base price of petrol has risen by Rs 3.3 a litre, which dealers are paying but make 3 paise more as their commission per litre, even as freight costs per litre remained the same at 36 paise. Value-Added Tax (VAT) has increased by 99 paise a litre.

Global crude prices firm up
The rise of petrol and diesel prices is a direct impact of the marked increase in global crude oil prices, which in turn is a result of the key global economies like the USA, Europe and China swinging back into work mode after the impact of the pandemic.

Brent crude oil is trading today at US$ 75, up from S70.35 on June 1. With these global trends, crude oil prices are not expected to fall anytime soon. So the Indian motorist will have to contend with sky-high petrol and diesel prices are sometime, unless the Central government and state governments decide to reduce their taxes on the two fuels. There is another choice though – alternate fuels like CNG or plugging into electric vehicles.