Since January 1, petrol prices have risen by Rs 9.89 a litre in Mumbai; diesel is currently priced at Rs 92.17 per litre in Mumbai.
After staying 6 paise short of the Rs 100-per-litre mark for two days at Rs 99.94, today’s hike – the 15th one in May 2021 – has taken the price of petrol past Rs 100, at Rs 100.19, in Mumbai. Diesel, meanwhile, is priced at Rs 92.17 per litre in Mumbai today.
Rate of price increase in diesel is more than that of petrol
Price differential between petrol and diesel has come down to Rs 8.02 from Rs 10.09 in the past 15 months
Taxes account for 58.60 percent of the price of petrol and 52.85 percent of diesel
Since January 1, 2021, when petrol cost Rs 90.30 a litre in Mumbai, it has risen by Rs 9.89 a litre. And since April 2020, when the BS6 era kicked in, it has become more expensive by Rs 24.91 a litre. Motorists in three other metros cities – Delhi, Chennai and Kolkata – pay Rs 6.25, Rs 4.68 and Rs 6.22 a litre less, respectively, than their counterparts in Mumbai.
Those tanking up on diesel – once known as the 'common man’s fuel' – are not spared of the price hike either. In fact, the rate of price increase in diesel is more than that of petrol. In Mumbai, today’s increase makes diesel dearer by 30 paise, taking the fuel to Rs 92.17 a litre. It has become costlier by 28 paise in Delhi (Rs 84.89), 26 paise in Chennai (Rs 89.65), and 28 paise in Kolkata (Rs 87.74).
The price differential between petrol and diesel, which was Rs 10.09 15 months ago – on April 1, 2020 – has now narrowed down to Rs 8.02 in Mumbai.
Consumers now spending much more money to travel the same distance
These wallet-busting fuel prices are hitting the Indian motorist – on two, four and more wheels – very hard. For instance, the owner of a fuel-sipping commuter motorcycle like the Hero Splendor, which has an 11-litre tank, would have paid Rs 828 to tank up on April 1, 2020 in Mumbai. Today, he pays Rs 1,102 – which is Rs 274 more – to go the same distance.
When it comes to cars, a Mumbai-based owner of a petrol-engined Maruti Wagon R, which has a 35-litre fuel tank, will today pay Rs 3,506.65 to tank up, compared to Rs 2,634.80 on April 1, 2020 – a sizeable difference of Rs 871.85. Meanwhile, to tank up his/her Hyundai Creta Diesel, which has a 50-litre fuel tank, the user will have to fork out Rs 4,558.50 today in Mumbai, compared to Rs 3,259.50 barely 15 months ago on April 1, 2020 – a marked difference of Rs 1,299.
In the case of commercial vehicles, the unabated price increase for diesel would be hitting their profitability hard. The TCO – Total Cost Of Ownership – formula is being hit for a six. Already badly impacted by the COVID-19-induced downturn and lack of business, owners of medium and heavy commercial vehicles (MCVs and HCVs) or even small CVs will be compelled to rejig their business models. For instance, a 37-tonner Tata truck like the LPT 3718 has a 400-litre tank. In April 2020, a full tank of diesel would have cost the owner Rs 26,076 in Mumbai. Now, in end-May 2021, he has to pay Rs 36,868 for the same quantity of diesel – Rs 10,792 more – each time the truck is tanked up.
The high level of taxes on the fuels
One of the reasons for the wallet-busting fuel prices is the high level of Central and State taxes. For instance, in Delhi, an estimated 35.53 percent of a petrol litre is levied as the Central government’s ‘Excise Duty’ and 23 percent is what the state levies. Put together, taxes account for 58.60 percent of the price of petrol – or Rs 55 – in the capital city. It’s similar with diesel – while Central taxes comprise 38.21 percent of the price, state VAT accounts for 14.64 percent of the retail price. Cumulatively, taxes comprise 52.85 percent – or Rs 44.86 – of the final retail price to the consumer.
The unabated increase in the price of fuels has exacerbated since end-April, after the election process in five states concluded. Motorists had, for close to two months before that, seen a welcome stoppage in fuel price increases but now it looks like they are back with a vengeance. And at a time when social distancing has meant more people taking to personal travel, the impact is being felt by all.
And, with galloping away prices of diesel, the impact on overall inflation can be seen. Reports have shown that, as per the wholesale price index (WPI), inflation rose to 10.49 percent in April 2021, compared to a decline of 1.7 percent in April 2020.