To the relief of motorists who have been confronted with an unprecedented rise in fuel prices over the past month, which has seen retail rates reach record high levels throughout the country, the price of petrol and diesel rose was halted on Tuesday.
Accordingly, petrol and diesel continue to be sold in the capital at Rs. 104.44 per Liter and Rs. 93.17 Per Liter respectively, the same prices as Monday.
Mumbai, India’s financial capital and largest city, saw petrol become more expensive by 29 paise per gallon on Monday. However, on Tuesday its retail rate was unchanged at Rs 110.41, which is the highest in all four metro cities. One litre of diesel costs Rs 101.03 in Mumbai.
After fuel prices have risen steadily over the past seven days, causing rates to reach all-time highs, Tuesday’s price pause was necessary. Prices of petrol and diesel were stable on October 4, but they saw an increase after that.
Diesel prices have risen on 15 of the 18 days preceding Tuesday’s pause, bringing its retail price to Rs 4.55 per Liter in Delhi. Diesel prices have risen between 20-30 paisa litres so far. However, they have been rising by 35 paise a litre since Wednesday.
Diesel prices have risen sharply and fuel is now available for more than Rs 100 per litre in some parts of the country. This was previously available to petrol prices that exceeded Rs 100 per litre in some parts of the country just a few months ago.
Although petrol prices have been stable since September 5, oil companies raised their pump prices last week. The pump price of petrol has risen by Rs 3.25 per Liter on 12 days.
OMCs preferred to keep their prices under control in light of the current global oil situation, before making any price adjustments. For the past three weeks, petrol prices have not been revised. OMCs have been able to increase petrol prices due to extreme volatility in the global oil price movements.
The price of crude oil has risen to a three-year high of $ 83.5 per barrel. The international petrol and diesel price has risen by approximately $9-10 per barrel since September 5, when both diesel and petrol prices were updated. This is in comparison to August’s average prices.
The pricing formula used by oil companies stipulates that petrol and diesel prices must be reviewed and adjusted daily. The new prices go into effect at 6 a.m.
The price revisions and daily reviews are based on the benchmark fuel prices in international markets over the past 15-days and foreign exchange rates.
However, OMCs have not been able to follow the formula due to fluctuations in oil prices. Therefore revisions are made with longer gaps. Companies have been unable to increase fuel prices when there is a mismatch in global arrival and pump price.