Good news: Crude oil prices have stabilised at a fairly low $49 to $50 a barrel range. More good news: The Indian rupee is appreciating against the dollar. That’s two strong arguments that call for a decrease, or at least stabilisation, in fuel prices, right? Wrong!
Looking at the trend, fuel prices have increased over 7.3% in the past 45 days. Daily price revision of fuel prices kicked in on 16 June. Click on the interactive infographic below to see the daily fuel price, crude oil price, and dollar vs rupee rate for this period.
Crude Oil Falls, Petrol & Diesel Prices Rise
When daily revision of fuel prices kicked in on 16 June 2017, most car and bike owners didn’t pay much attention, as the daily variance in prices was just by a few paisa. In fact, in the first few days after daily revision kicked in, fuel prices fell. However, since 3 July, it has been constantly rising, except for 3-4 occasions when it dropped slightly.
Also read: Here’s Why You Will Pay More for Petrol and Diesel
Even when crude oil prices dropped – on 24 July, oil was down to $46.91 per barrel – fuel prices continued to rise. On 24 July, petrol went up from Rs 64.28 per litre to Rs 64.57 per litre.
Alright, you can argue that the rupee weakened ever so slightly against the dollar that day – from Rs 64.32 per dollar to Rs 64.45 per dollar. Well, hold that thought.
Let’s look at another date, more recent, such as 20 August. Crude oil was at $49.75 per barrel, the rupee was trading at Rs 64.14 to the dollar, and petrol price had risen to Rs 68.29 per litre. Fair enough.
A few days later on 28 August, oil went up to $51.04 per barrel. The rupee had strengthened to Rs 63.82 to the dollar, and petrol was up to Rs 69.13 per litre! On 30 August, oil cooled off to $50.52 per barrel, the rupee was strong at Rs 63.94 to the dollar and yet, petrol has reached its highest price so far – Rs 69.19 per litre. That’s in Delhi.
In Mumbai, petrol is now Rs 78.31 per litre, among the most expensive places to buy fuel in the country! The cheapest petrol in the country is still available in Goa, although, it’s not as cheap as before. Petrol in Goa is now Rs 62.69 per litre.
The thing is, this fuel price increase is unfair. Clearly, even with crude oil prices dropping and hovering around the lowest it has been in years, petrol prices and diesel prices have not dropped. The government has fully deregulated both these fuels, but in an effort to rake in extra cash, it has increased excise duties on fuel. And it has also hiked dealer margins slightly.
In fact, globally, India has had the steepest hike in fuel prices from the previous year, compared to any of the other countries. Our fuel prices have gone up 11.8%, while others have remained steady, and some have declined too!
Clearly, someone is making money, and our guess is, it’s the oil marketing companies –IOCL, BPCL and HPCL, who are benefiting the most. In the words of the wise Twitter user –Acche din aa gaye oil companies ke liye!
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