New Delhi: Petrol and diesel prices were on Tuesday hiked by 80 paise a litre each while domestic cooking gas LPG rates were increased by Rs 50 per cylinder as state oil firms ended an over four-and-a-half month election-related hiatus in rate revision.
Petrol in Delhi will now cost Rs 96.21 per litre as against Rs 95.41 previously while diesel rates have gone up from Rs 86.67 per litre to Rs 87.47, according to a price notification of state-owned fuel retailers.
In Mumbai, the petrol price has been hiked by Rs 0.84 per litre to Rs 110.82 per litre, and diesel by Rs 0.86 to Rs 95 per litre.
The rates, which differ from state to state depending on the incidence of local taxes such as VAT, are likely to continue to rise over the next few days as state oil firms recoup losses from keeping prices on hold for a record 137 days.
According to CRISIL Research, a hike of Rs 15-20 per litre is required to fully pass through a USD 30 per barrel increase in the cost of raw material (crude oil).
Simultaneously, the price of non-subsidised LPG cylinders has been increased to Rs 949.50 per 14.2-kg bottle in the national capital and Mumbai, and to Rs 976 in Kolkata.
While LPG rates were last revised on October 6, 2021, petrol and diesel prices had been on a freeze since November 4 as five states, including Uttar Pradesh and Punjab, went to the polls.
LPG prices had gone up by close to Rs 100 per cylinder between July and October 6, 2021, before criticism halted the monthly revision in rates.
Non-subsidised cooking gas is the one that consumers buy after exhausting their quota of 12 cylinders at subsidised or below market price. However, the government pays no subsidy on LPG in most cities and the price of the refill that consumers, including the poor women who got free connection under the much-talked Ujjwala scheme, buy is the same as non-subsidised or market price LPG.
This is the highest rate ever that subsidised LPG users will pay. The non-subsidised rate had peaked at Rs 1,241 in January 2014, but at that time, the government provided as much as Rs 600 per cylinder subsidy.
Since May 2020, no subsidy has not been provided to consumers except some to those in far-flung areas to make up for higher inland freight.
The resumption of fuel price hikes has fanned concerns of stoking inflation, which is already above the targeted 6 per cent level.
The Opposition parties were quick to attack the government on the price rise, with Congress, TMC and Left parties forcing two adjournments of proceedings in the Rajya Sabha.
A 5 KG LPG cylinder will now cost Rs 349, while the 10 kg composite bottle will come for Rs 669.
The 19-kg commercial cylinder now costs Rs 2,003.50.
Since June 2017, petrol prices are to be adjusted daily in line with the benchmark international rate in the preceding 15 days. But, rates have been on the freeze since November 4, 2021, just after the Modi government cut excise duty on petrol by Rs 5 per litre and that on diesel by Rs 10 a litre to bring down rates from record-high levels. Most state governments too lowered local sales tax or VAT.
Before these tax reductions, petrol price had touched an all-time high of Rs 110.04 a litre, and diesel came for Rs 98.42. These rates corresponded to Brent soaring to a peak of USD 86.40 per barrel on October 26, 2021.
Brent was at USD 82.74 on November 5, 2021, before it started to fall and touched USD 68.87 a barrel in December.