The budget levy of new agriculture infrastructure and development cess on petrol and diesel did not have an impact on retail prices of both the products on Tuesday as oil marketing companies (OMCs) took cognizance of the fact that additional duty has been offset by an equal cut in excise duty rates.
The OMCs also ignored the signals given by the international market where oil prices rose sharply by over 1 per cent nearing $57 a barrel. This would have normally pushed OMCs into raising petrol and diesel prices to reduce their under recovery.
With prices on hold on Tuesday, petrol continued to be available at new record high of Rs 86.30 a litre in Delhi while diesel is available at Rs 76.48 a litre. This is the sixth consecutive day when fuel prices have remained static.
The fuel prices remained unchanged across the country as well.
In Mumbai, petrol was priced at Rs 92.86 a litre while in Chennai it was at Rs 88.82 a litre and in Kolkata Rs 87.69 a litre.
Diesel on the other hand is at Rs 83.30 a litre in Mumbai, Rs 81.71 per litre in Chennai and Rs 80.08 a litre in Kolkata.
Though firm global crude and product price is the reason for the increase in retail price of petrol and diesel, with crude hovering just over $55 a barrel for some time, OMCs have gone in for both a pause in price of auto fuels as well increase in its retail prices on consecutive days.
Informed sources said that oil companies may be building buffer on retail price of petrol and diesel to prevent any sharp price hike by government decided to further raise excise duty on the two products to mobilise additional revenue.
Crude price have remained firm for last few weeks in wake of unilateral production cuts announced by Saudi Arabia and a pick up in consumption in all major economies globally.
The petrol and diesel prices have increased 10 times in January with the two auto fuels increasing by Rs 2.59 and Rs 2.61 per litre respectively this month.
The last few increases 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 $80 a barrel.
The current price rise is largely on account of steep increase in central taxes of petrol and diesel and firm crude prices.
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 in the month. The price rise started again only on January 6.
Oil companies executives said that petrol and diesel prices may increase further in coming days as retail prices may have to be balanced in line with global developments to prevent OMCs from making loss on sale of auto fuels.