Petrol and diesel prices have risen by around Rs 3 on May 15 as oil marketing companies increased fuel prices amid soaring global crude oil rates, supply concerns in West Asia and a weakening rupee. In Delhi, petrol now costs Rs 97.77 per litre, up from Rs 94.77 earlier. Diesel prices have also increased to Rs 90.67 per litre from Rs 87.67.
The latest increase mainly reflects a rise in the base price charged to dealers, which moves in line with international crude oil prices and import costs.
How Petrol Price Is Calculated
According to the earlier official price build-up released for Delhi on April 1, the base price of petrol charged to dealers stood at Rs 74.97 per litre. After adding dealer commission and VAT, the retail selling price came to Rs 94.77 per litre.
Now, after
the latest Rs 3 hike, petrol prices in Delhi have increased to Rs 97.77 per litre.
This means the revised price structure roughly works out as follows:
Petrol Price Breakup in Delhi
| Component | Amount (Rs/Litre) |
|---|---|
| Price charged to dealers (excluding VAT) | 77.97 |
| Dealer commission (average) | 4.40 |
| VAT and other taxes | 15.40 |
| Retail selling price | 97.77 |
Diesel Price Break-Up
| Component | Amount (Rs/Litre) |
|---|---|
| Price charged to dealers (excluding VAT) | 74.81 |
| Dealer commission (average) | 3.03 |
| VAT and other taxes | 12.83 |
| Retail selling price | 90.67 |
These are back-of-the-envelope calculations. The actual break-up will be known after the oil marketing companies release the official structure soon.
Why Fuel Prices Are Rising
Fuel prices have surged due to a sharp jump in global crude oil prices amid escalating tensions in the Gulf region and fears of supply disruption through the Strait of Hormuz, a key global oil transit route.
At the same time, shipping, freight and insurance costs for crude imports have also increased sharply.
The weakening rupee against the US dollar has added further pressure because India imports more than 85 per cent of its crude oil requirement.
Govt Had Earlier Cut Excise Duty
The latest increase comes despite the Centre earlier announcing relief measures.
On March 27, the government reduced excise duty by Rs 10 per litre on both petrol and diesel to cushion consumers from rising global crude oil prices and geopolitical uncertainty.
The excise duty cut had temporarily helped moderate retail fuel prices. However, the fresh spike in crude oil rates and import-related costs has once again pushed petrol and diesel prices higher across the country.
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