Substantial increase in fuel prices on cards as crude crosses $82 a barrel

Petrol price on Tuesday was hiked by 25 paise a litre and diesel by 30 paise, sending retail rates to all-time high levels, with a "substantial" increase in the offing in coming days as international oil prices touched seven-year high.

The petrol price in Delhi rose to its highest-ever level of Rs 102.64 a litre and to Rs 108.67 in Mumbai, according to a price notification of state-owned fuel retailers.

Diesel rates too touched a record high of Rs 91.07 in Delhi and Rs 98.80 per litre in Mumbai.

Prices differ from state to state depending on the incidence of local taxes.

State-owned fuel retailers have in the past few days resorted to modest increases to align domestic rates with cost. But with international benchmark Brent crude soaring to USD 82.37 per barrel as a result of the decision by OPEC+ not to increase output more than 0.4 million barrels per day, fuel rates are bound to rise.

"Substantial" increase is on the cards to bridge the gap between cost and sale price, industry sources said.

Sources said oil companies had kept increases to a modest level in anticipation of correction in crude oil and petroleum product prices in the international market.

"Oil marketing companies have only made a moderate increase in retail prices of petrol and diesel so far," a source said. "However, in the event of such correction not being there, the price increase could be substantial."

The sixth increase in fuel rates in a week's time has sent petrol prices above Rs 100 a litre in most major cities of the country on Tuesday.

Similarly, the ninth increase in prices in less than two weeks has shot up diesel rates above Rs 100 mark in several cities in Madhya Pradesh, Rajasthan, Odisha, Andhra Pradesh and Telangana.

International oil prices rallied to a near seven-year high following a decision by OPEC+ to maintain its planned gradual increase of supply, despite the market facing an energy crunch.

Global benchmark Brent jumped to USD 81.51 per barrel, while West Texas Intermediate rose to USD 77.76 a barrel.

Being a net importer of oil, India prices petrol and diesel at rates equivalent to international prices.

A month back Brent was less than USD 72 per barrel.

With international crude oil prices moving in both directions during July and August, no price increase was carried out by oil marketing companies (OMCs) from July 18 to September 23. Instead, petrol price was cut by Rs 0.65 a litre and diesel by Rs 1.25.

However, with no respite from surging international prices, OMCs have started to increase the retail selling price of petrol and diesel with effect from September 28 and September 24, respectively.

Since then, rates have gone up by Rs 2.45 paise per litre and petrol price has increased by Rs 1.50.

Prior to the July/August price cuts, the petrol price was increased by Rs 11.44 a litre between May 4 and July 17. Diesel rate had gone up by Rs 9.14 during this period.

The relentless increase in fuel prices has been criticised by opposition parties who have demanded that the government cut record excise duty on the two fuels to give relief to consumers.

The government has so far not agreed to the demand.

Oil Minister Hardeep Singh Puri on Saturday refused to even comment on the high fuel prices.

Asked about the fuel prices at his ministry's event in the national capital on Saturday, Puri said, "chhodo (please leave it)" before walking away.