Petrol prices crossed Rs 100 per liter mark in many cities on Sunday after the price was raised by 24 paise per litre. Diesel price was hiked by 27 paise per litre. This was the ninth price hike this month which resulted in petrol getting costlier by Rs 2.18 and diesel by Rs 2.49 a litre.
The rise has pushed petrol prices above Rs 100 per liter in several cities in Rajasthan, Maharashtra and Madhya Pradesh.
Mumbai has highest fuel rates
Mumbai has the highest rates of fuel among the major metro cities. Petrol now costs Rs 98.88 per liter in Mumbai, while diesel is priced at Rs 90.40 per liter.
However, retail prices for petrol and diesel differ from place to place due to different state taxes and local levies.
Key reasons for higher rates
The two main reasons for the rise in petrol and diesel prices are – high taxes on auto fuels and the rise in international oil prices. However, a large part of retail prices is made up of the tax component. For example, in Delhi central taxes were 35.5% of the price of petrol and state taxes were 23% on May 16.
Central levies on diesel are above 38.2%, while state taxes are around 14.6%. Through last year, the government increased excise duty on fuel as global crude prices fell due to COVID-19’s economic impact. States also followed suit.
Deregulation of petrol and diesel prices
On June 26, 2010, the government deregulated prices of petrol and diesel on October 19, 2014. As a result, state-run retailers are allowed to change pump prices on a daily basis.