Fuel prices hiked again, second time in 5 days
For the second time in a span of five days, prices of petrol and diesel were hiked again on Tuesday by about 90 paise per litre across the country and across all variants.
The increase pushed petrol prices in New Delhi to Rs 98.64 per litre from Rs 97.77, while diesel rose to Rs 91.58 from Rs 90.67. Mumbai saw petrol rise by 91 paise to Rs 107.59 per litre and diesel by 94 paise to Rs 94.08 per litre. Kolkata recorded the steepest hike in petrol at 96 paise to Rs 109.70 per litre, while diesel prices rose by 94 paise to Rs 96.07 per litre. In Chennai, petrol prices rose by 82 paise to Rs 104.49 per litre, and diesel by 86 paise to Rs 96.11 per litre.
The Rs 4 per litre increase in fuel prices in two instalments is likely to have an impact on retail inflation that could soon spill over into household budgets and everyday spending.
Economists say that if the situation does not improve in the coming days, then more hikes may be in the offing. However, the approach of gradual hikes in petrol and diesel prices is to avoid an immediate inflation shock to the economy.
The fresh hike comes after State-run oil marketing companies had already increased fuel prices by around Rs 3 per litre last Friday, for the first time in more than four years, as surging global crude prices following the Iran war forced State-run fuel retailers to pass on part of their mounting losses after months of holding rates steady through key State elections. Rates vary across States due to differences in value-added tax. After Tuesday’s increase, petrol and diesel prices are now the highest since May 2022.
On May 15, compressed natural gas (CNG) prices were also raised by Rs 2 per kg in cities, including Delhi and Mumbai. On Sunday, CNG prices were again hiked by Rs 1 a kg.
The rise of global crude oil prices to above $100 per barrel levels since the start of the US-Iran conflict has sent shockwaves across most major economies around the world. With the Strait of Hormuz still closed and a trickle of traffic flowing through it, supplies are disrupted, and there seems to be no end in sight as of now. What this has meant is that major economies around the world, including India, have been forced to raise prices of petrol and diesel as the import bill continues to rise.
