Fuel prices at record high levels, may go up

New Delhi: Hitting motorists and ordinary citizens alike, petrol prices on Sunday touched a nearly five-year high and diesel reached a new peak as the public sector oil companies continued to increase fuel prices after the Karnataka Assembly elections.

In Delhi, petrol reached a record high of Rs 76.24 per litre on Sunday as its price was raised by 33 paise and diesel touched an all-time high of Rs 67.57 per litre after its price was increased by 26 paise.

After the 19-day pre-Karnataka poll hiatus, the oil PSUs have been increasing petrol and diesel prices every day since May 14. In a week, the petrol price has been raised by Rs 1.61 a litre and diesel by Rs 1.64 per litre.

As petrol and diesel have been left outside GST, their prices and quantum of increase vary from state to state depending upon local taxes.

In other metros, petrol in Mumbai was at Rs 84.07 per litre and diesel Rs 71.94 a litre. In Chennai, petrol cost Rs 79.13 per litre and diesel Rs 71.32 a litre. In Kolkata, petrol was Rs 78.91 a litre and diesel Rs 70.12 a litre. Besides Mumbai, petrol has breached the Rs 80 mark in Bhopal (Rs 81.83 a litre), Patna (Rs 81.73), Hyderabad (Rs 80.76) and Srinagar (Rs 80.35).

Diesel is the costliest in Hyderabad, where it is priced at Rs 73.45 a litre due to high local taxes. The increase in petrol and diesel is likely to increase inflation as it makes the transportation of goods and other services costlier.

Petrol and diesel prices are expected to rise in the coming days too as crude oil is hovering at around $80 a barrel. If crude oil prices continue to rise, it could challenge the macroeconomic calculations of the government.

A 10 per cent increase in crude oil prices could potentially increase retail inflation by 0.2-0.3 per cent, increase the current account deficit/GDP ratio by 0.3 per cent and lower overall GDP growth by 0.1 per cent, according to a report by Yes Bank.