Petrol and diesel prices were slashed for the first time in 2021 after a sharp fall in global crude oil prices. State-run oil marketing companies (OMCs) on Wednesday cut petrol and diesel prices by 18 paise and 17 paise respectively.
After today’s cut, a litre of petrol in Delhi costs Rs 90.99, down from Rs 91.17. Petrol rates have also dropped in other major cities, including Kolkata (Rs 91.18), Mumbai (Rs 97.40), Chennai (Rs 92.95), Bengaluru (Rs 94.04), Hyderabad (Rs (Rs 94.61) and Jaipur (Rs 97.56).
Meanwhile, diesel price in Delhi has now come down to Rs 81.30, down 17 paise from yesterday. It has also dropped in other major cities, including Kolkata (Rs 84.18), Mumbai (Rs 88.42), Chennai (Rs 86.29), Jaipur (Rs 89.84), Bengaluru (Rs 86.21) and Hyderabad (Rs 88.67).
While today’s drop may not provide sufficient relief to citizens, the fact that OMCs reduced rates after a fall in global oil prices is a positive development. This indicates that if global oil prices fall further, OMCs are likely to pass on the benefit to consumers.
However, the more significant reason behind India’s excessive petrol and diesel rates is the high fuel tax levied by the Centre and state governments.
Given that higher fuel prices are affecting demand negatively, a decision should be taken soon to give tax relief. It may be noted that nearly 60 percent of petrol and diesel cost in India comprises taxes.
Experts have highlighted in the past that high fuel prices could contribute to inflationary pressure and ultimately impact India’s economic recovery in the near-term. Higher petrol and diesel prices have already had a cascading impact on essential commodities and services.
