The price of petrol in Mumbai, which has been scaling record highs since the past month, will cross the Rs 100-a-litre mark in the next price hike – the 15th in May 2021 – which should happen any day soon, maybe even tomorrow. Today’s price increase – the 14th this month – sees an increase of 23 paise, taking it to Rs 99.94, just six paise short of the Rs 100 mark.
Interestingly, at Rs 99.94 a litre, the price of petrol is the same as one of cricket’s most iconic statistics – Sir Donald Bradman’s batting average of 99.94.
The 14 price hikes over 22 days this month (from May 5-27) have seen petrol become costlier in India’s maximum city by Rs 2.82 a litre. Seen over 15 months, when the BS VI era kicked in on April 1,2020, the hard truth hits home – Mumbai motorists are paying Rs 24.66 more to travel the same distance. Do the math and you’ll find out that petrol in Mumbai has become costlier by 33% since April 2020, when it cost Rs 75.28.
Diesel not far behind
Like their petrol-using brethren, motorists tanking up on diesel have not been spared the price hikes either. In fact, the percentage of price increase is even more. At Rs 91.87 a litre in Mumbai today, diesel price has increased by 30 paise. The 14 price hikes in the month till now have hiked diesel price by Rs 3.68 a litre. And since April 2020, diesel has become dearer by Rs 26.68 a litre, which constitutes a 41% increase over 15 months.
Blame the price rise on taxes
One of the reasons for the wallet-busting fuel prices is the high level of Central and State taxes. For instance, in Delhi, an estimated 35.53% of a petrol litre is levied as the Central government’s ‘Excise Duty’ and 23% is what the state levies. Put together, taxes account for 58.60% of the price of petrol in the capital city. It’s similar with diesel. While Central taxes comprise 38.21% of the price, state VAT accounts for 14.64% of the retail price. Cumulatively, taxes comprise 52.85% of the final selling price to the consumer.
The unabated increase in the price of fuels has exacerbated since end-April, after the election process in five states concluded. Motorists had for nearly two months before that seen a welcome stoppage in fuel price increases but now the price hikes are back with a vengeance – nearly one every second day. And at a time when social distancing has meant more people taking to personal travel, the impact is being felt by all.
And, with galloping away prices of diesel, the impact on overall inflation can be seen. Reports have shown that as per the wholesale price index (WPI), inflation rose to 10.49% in April 2021 compared to a decline of 1.7% in April 2020.
Little wonder Bal Malkit Singh, Chairman – Core Committee and former president, All India Motor Transport Congress, who spoke to Autocar Professional recently, is worried. He says the CV industry, which tanks up on diesel, is bearing the brunt of the fuel price rise. “India's commercial vehicle industry is currently losing Rs 1,600 crore a day. The country is facing the unprecedented pandemic, everyone is already facing a huge crisis be it losing their loved ones, depression, stress or having no source of livelihood. In our industry, almost 70% of the trucks are idle, only 30% are operational and that too in the essential delivery segment – oxygen, medical equipment, medicines or FMCG goods.”
“There are around 20 crore people directly or indirectly involved in the transport or trucking sector. The fuel price hike impacts almost 130 crore people. Diesel as a fuel constitutes almost 65% of our operational cost. It is quite obvious with the increase in fuel prices, our operational cost will go up. On the other hand, there is low capacity utilisation because of the lockdowns in almost the entire country.”