Petrol, diesel prices rise again amid volatility in oil market

Photo used for representational purpose

The prices of petrol and diesel rose simultaneously again on Tuesday amidst volatility in the global oil prices with benchmark crude increasing to above $80 a barrel.

Accordingly, diesel prices increased by 30 paisa per litre in the national capital to Rs 91.07 per litre, while petrol rates rose by 25 paisa per litre to Rs 102.64 a litre, according to Indian Oil Corporation, the country's largest fuel retailer.

Diesel prices have now increased on nine out of the last 12 days taking up its retail price by Rs 2.45 per litre in Delhi.

Diesel prices were raised on Friday by 20 paisa per litre and again by 25 paisa per litre each on Sunday, Monday and Tuesday last week and by 30 paisa per litre on Thursday, Friday, Saturday and Sunday. And again by 30 paisa per litre on Tuesday.

Petrol prices had maintained stability since September 5 but oil companies finally raised its pump prices this week given a spurt in the product prices lately. Petrol prices have also risen on six of the previous eight days taking up its primo price by Rs 1.45 per litre.

OMCs had preferred to maintain their watch prices on global oil situation before making any revision in prices. This is the reason why petrol prices were not revised for last three weeks. But extreme volatility in global oil price movement has now pushed OMCs to effect the increase.

In Mumbai, the petrol price rose by 25 paisa per litre to over Rs 108.67 per litre, while diesel rates increased close to Rs 98.80 a litre.

Across the country as well, petrol and diesel increased between 20-30 paisa per litre but their retail rates varied depending on the level of local taxes.

Fuel prices in the country have been hovering at record levels on account of 41 increases in its retail rates since April this year. It fell on few occasions but largely remained stable.

After rising over three year high level of $80 a barrel earlier this week, global benchmark came down to $78 a barrel and now is again up to $81 a barrel while OPEC+ deciding to stick to its marginal production easing plan and market remaining tight.

Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $8-9 per barrel as compared to average prices during August.

Under the pricing formula adopted by oil companies, rates of petrol and diesel are to be reviewed and revised by them on a daily basis. The new prices becomes effective from morning at 6 a.m.

The daily review and revision of prices is based on the average price of benchmark fuel in the international market in the preceding 15-days, and foreign exchange rates.

But, the fluctuations in global oil prices have prevented OMCs to follow this formula in totality and revisions are now being made with longer gaps. This has also prevented companies from increasing fuel prices whenever there is a mismatch between globally arrived and pump price of fuel.

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