You must be feeling the pain of rising fuel prices after it hit the century mark across the country last month. But, the rise has not been sudden and the pain has been consistent throughout the last financial year and this year too, taking the pump prices of petrol and diesel to unprecedented levels not seen before, even during the big surge in global oil during 2010-14 period when crude prices remained largely above $100 a barrel.
A close look at the official data provided by Petroleum Planning and Analyses Cell reveals that petrol prices (in the national capital) rose by a whopping Rs 20.97 per litre between April 1, 2020 and March 31, 2021 in FY21, the highest-ever levels to be recorded so far.
Petrol was priced at Rs 69.59 a litre at the beginning of FY21 on April 1 last year and it was priced at Rs 90.56 a litre on March 31 year. This is a growth of 30.13% in FY21. The story of price hike doesn't end in the last fiscal. It has continued well into FY22, albeit at a much sharper pace. In the three and half months of the current fiscal, petrol prices have already risen by Rs 10.63 paise a litre in Delhi from a level of Rs 90.56 a litre on April 1 to Rs 101.19 on July 14 in Delhi. This is already a growth of 11.73%.
In comparison to petrol, diesel price rise has been less sharper. One reason for this has been VAT cuts effected by several state governments to keep the price rise of this transport fuel under some manageable levels. Also, oil marketing companies have gone soft on diesel price rise lately, reducing the quantum of hike compared to petrol and in fact cutting the price of the fuel marginally on Monday, the first time in several months.
With regard to diesel prices, in FY21 the retail price of the fuel rose by Rs 18.58 per litre from Rs 62.29 a litre on April 1, 2020 to Rs 80.87 a litre on March 31, 2021, a growth of 29.83% in Delhi. The rise of diesel has been sharper in FY21 in Mumbai where it rose by Rs 21.75 per litre from Rs 66.21 a litre last year to Rs 87.96 a litre this year March end.
In the current fiscal, diesel rates have risen by Rs 8.85 in Delhi from Rs 80.87 on April 1 to Rs 89.72 now. In Mumbai, the fuel has risen by Rs 9.33 per litre to Rs 97.29 a litre now. The fuel is most expensive in Mumbai among all the metros.
The story of fuel price hike over the last five quarters is even harsher in states such as Rajasthan, Madhya Pradesh, Tamil Nadu, Maharashtra where local duties on petrol and diesel are the highest in the country.
"The fuel price rise in FY21 has been unprecedented as the only reason that can be cited is the high level of taxes imposed by the Centre on petrol and diesel in May last year to mobilise additional revenue for Covid relief measures. This is after global oil prices have firmed up in the last one year but is still far off from 2012-13 level of over $100 a barrel when fuel prices were just over Rs 70 a litre," said an oil sector expert not willing to be quoted.
Global crude is priced just above $75 a barrel now to take fuel prices to historic high levels. A look at fuel price in 2012 brings out the contrast as the crude in September that year touched over $110 a barrel, still petrol prices hovered around Rs 70 a litre while diesel was close to Rs 50 a litre.
With crude expected to remain moderately firm over next few months, relief to consumers from higher fuel prices could only be expected when government decides to cut tax rates. However, senior finance ministry functionaries have indicated that tax cut is not on the table as of now and they were hoping that crude prices itself would soften as more oil is pumped by major producers. This could keep fuel over the century mark for some time to come.
(Subhash Narayan can be contacted at firstname.lastname@example.org)