The increase in the pump price of petrol and diesel has come on a day when global oil prices gave a glimpse of softening with crude falling below $ 55 a barrel after almost a week of hovering above that range.

 

With Tuesday's increase, petrol is being sold at Rs 85.20 a litre in Delhi from the previous day price of Rs 84.95 a litre. Similarly, diesel prices also increased to Rs 75.38 a litre, up from previous day's level of Rs 75.13 a litre.

 

Across the country as well pump price of petrol and diesel increased but the quantum of the rise varied from state to state depending on the level of taxation on the two petroleum products.

 

The last two days of increase in pump prices in petrol and diesel has taken its price to record levels across the country in all major metro cities and other towns. The last time the retail price of auto fuels were closer to current levels was on October 4, 2018 when crude prices had shot up up $ 80 a barrel.

 

The current price rise is largely on account of steep increase in the central taxes of petrol and diesel as crude prices are still below $ 55 a barrel.

 

Only in Delhi, the retail price of diesel is still below record levels reached early last year when the state government had substantially raised VAT on it to boost its pandemic affected revenue.

 

Auto fuel price rise was on hold for the last three days after petrol and diesel prices had increased on two successive days last week on Wednesday and Thursday taking gasoline to new record high levels in Delhi and several other places in the country. It had risen on two days in the week prior to last week as well.

 

OMCs ran out of patience on Wednesday as global crude prices have risen sharply lately taking benchmark Brent crude price to over $57 a barrel now and rising. The rise is primarily on account of Saudi Arabia's decision on unilateral production cuts to balance oil prices on pandemic affected demand reduction in an oversupplied market.

 

Petrol price was very close to breaching the all-time high level of Rs 84 a litre (reached on October 4, 2018) when it touched Rs 83.71 a litre on December 7, 2020. But the march had been halted ever since then with no price revision by the OMCs.

 

Oil companies executives said petrol and diesel prices may increase further in coming days as retail prices may have to be balanced in line with the global developments to prevent the OMCs from making losses on the sale of auto fuels.