Petrol, diesel prices have risen daily for three weeks

Petrol and diesel prices continued their cat and mouse chase in the capital to become the most expensive auto fuel. Petrol is now just a whisker away to returning to its numero uno spot.

Oil marketing companies (OMCs) including Indian Oil, Bharat Petroleum, Hindustan Petroleum Saturday increased the price of petrol and diesel by 25 and 21 paisa, respectively, completing three weeks of everyday rise.

This has led the price of petrol to Rs 80.38 a litre and diesel to Rs 80.40 a litre in Delhi, keeping the diesel still ahead in the pricing game, a feat it achieved on Wednesday for the first time ever in the country.

What has made the catching up game interesting again is the quantum of increase in retail price of the auto fuels where balance seems to be shifting again towards petrol.

The amount of increase in petrol price in Delhi has been higher than diesel for last two days — on Friday petrol increased by 21 paisa against 17 paisa increase in diesel prices, and on Saturday as well petrol increased by 25 paisa a litre while diesel by 21 paisa a litre.

Before this, for many days diesel price increase was higher than petrol.

Officials in OMC said that it is hard to predict which of the two fuels will be priced higher in the capital as the gap between the two is almost negligible. But petrol prices have shown more volatility in international markets that may take it ahead once again in coming days.

Apart from Delhi, the retail prices of petrol and diesel have followed the traditional path in other metros with petrol being priced at a premium of between Rs 5 and 8 per litre. The difference between the auto fuel prices in Delhi and other metros is because of the taxation structure.

While both petrol and diesel are at similar level of taxes (state and centre) in Delhi, it is higher for petrol in many other Indian cities.

Globally diesel is priced a tad higher than petrol. In India too, the base price of diesel is slightly higher than petrol but taxation at central and state levels changed the complexion of retail prices.

While auto fuel prices are now increasing for 21 days, the good news is that the quantum of fuel price increase has fallen.

If price of petroleum products and crude hold their positions in global markets, then petrol and diesel prices rise can stop and we may even see marginal fall in prices.

Fuel prices have been increasing since June 7 when oil companies began the daily price revision mechanism after a hiatus of 82 days during the lockdown.

Prices of transportation fuel were last revised under the dynamic pricing policy on March 16 and there were few instances of price hike later only when the respective state governments hiked VAT or cess..