Petrol prices are inching dangerously close to the unheard of Rs90-per-litre level in Mumbai.
On Sept. 16, they hit Rs89.29 per litre in India’s financial capital. Once they breach Rs90 there, this level may be treated as the new normal for fuel prices in the country. In fact, in some cities of the western state of Maharashtra, of which Mumbai is the capital, they have already crossed that mark.
Fuel prices have been steadily rising across the country, especially in New Delhi, Mumbai, Kolkata, and Chennai, even a week after opposition parties staged a nation-wide protest to criticise government inaction amidst the crisis. This has happened mostly due to rising global crude oil prices, nearing $80 a barrel, and a weak rupee.
Here’s India’s fuel crisis unfolding in four major cities:
India imports almost 80% of its fuel needs, and the rupee trading at 72 to the US dollar is worsening the situation.
Taxes and dealer commissions make up almost 50% of fuel prices in India. On Sept. 17, in response to the crisis, the government in Karnataka cut petrol and diesel prices by Rs2 per litre, following in the footsteps of Andhra Pradesh, West Bengal, and Rajasthan.
The central government, meanwhile, has said it may consider a cut in excise duties to calm the storm, but has ruled out the policy of subsidising fuel.