While the Coronavirus scare and continued flat demand for oil has pushed down the global crude price that has fallen sharply by over 24 per cent to $53 a barrel over last one month, there has been less than proportional decrease in retail price of petrol and diesel with oil companies building a cushion for possible increase in oil prices later this year.
Petrol is being retailed at Rs 72.98 a litre while diesel at Rs 66.04 a litre in Delhi when crude oil price of Indian basket is about $55 a barrel. At this level of crude in September-October 2017 (crude price between $ 54-56 a barrel), petrol was being retailed between Rs 69 and Rs 70 a litre and diesel between Rs 57 and Rs 58 a litre in Delhi. Again on a crude price of $57-59 a barrel in December-January FY19, petrol prices remained close to Rs 71 a litre while diesel at Rs 64 a litre.
And the continuing high price of auto fuels now is despite the government having reduced excise duty on the two petroleum products by Rs 2 a litre and Rs 1.50 a litre in the year 2017 and 2018 respectively after increasing the duty on two products on nine occasions in the past. The duty also moved up last year in Budget by Rs 2 a litre.
“It seems state-owned oil marketing companies are making up for the losses they have incurred in earlier months when there was a momentary spike in prices. This is gross injustice for consumers who have braved historically high levels of auto fuels when global oil prices were rising in late 2018.
Ideally, petrol and diesel prices should have been lower by at least Rs 3-5 a litre than current levels,” said a top official of an oil producing company asking not to be named.