After months of steep ascent, retail fuel prices in India have finally begun to head south.
Petrol and diesel prices across the country’s major cities dropped for a sixth consecutive day on Tuesday (Oct. 22) on the back of softening global crude prices.
On Tuesday, petrol was cheaper by 10 paise per litre in all major cities, and by 11 paise per litre in the southern city of Chennai. The fuel now costs Rs81.34 a litre in Delhi and Rs86.81 a litre in Mumbai, according to the state-owned oil marketing company Indian Oil Corporation.
Diesel prices too fell by 7 paise per litre on Tuesday across major cities. In Delhi, diesel now retails for Rs74.85 a litre, a tad higher than Mumbai’s Rs74.46 a litre.
Since Thursday last week, diesel prices are down by 73 paise a litre, while petrol prices have fallen by Rs1.28 a litre in Delhi. A month ago, petrol was hovering over the Rs90 mark, and diesel was being sold at a record high of over Rs80, which, many feared, would become the new normal.
The fall comes as a much-needed relief for consumers, who have been reeling under high fuel prices for the past few months. Rising fuel prices had also become a concern for prime minister Narendra Modi’s government, especially due to the political implications of high inflation just before an election year.
On Oct. 04, the government announced the slashing of excise duty on petrol and diesel by Rs1.50 per litre and asked India’s oil marketing companies (OMCs) to further subsidise the fuels by another Re1 a litre. Following the announcement, prices fell by around Rs2.50 per litre across the country.
To OMCs, though, the news came as a jolt. Right after the announcement of the excise duty cut, shares of many state-owned OMCs fell by over 20% to multi-year lows as fears of a return to the regime of government regulation resurfaced.
Consumers in the eastern Indian state of Odisha, though, are facing a curious situation. Here, price of diesel have surpassed that of petrol. On Sunday (Oct. 21), diesel was being sold at Rs80.69 per litre in capital Bhubaneswar while petrol was retailing at Rs80.57 per litre.
Usually state governments charge a higher value added tax (VAT) on petrol than diesel, but Odisha charges 26% on both, leading to diesel becoming costlier than petrol.
The VAT that state governments impose on diesel and petrol has become the target of public ire. On Monday, petrol pumps and CNG stations were shut in Delhi following a strike called by the Delhi Petrol Dealers Association to protest the state government’s refusal to cut VAT on diesel and petrol.