Possibly for the first time in Independent India, the price of petrol has crossed the Rs 100/litre threshold.
The dubious distinction goes to Rajasthan’s Sriganganagar district (Rs 100.13). Diesel is agonisingly close at Rs 92.13 in the city.
Apologists would, of course, point out that Rajasthan has one of the highest VAT rates on fuel despite the State government reducing it on both fuels by 2% last month.
The denizens of Mumbai can take solace in the fact that the petrol price is yet to cross the physiological mark and despite the seemingly 25 paise per litre hike on Wednesday, it is still hovering at Rs 96.
Owing to these seemingly marginal hikes in nine straight days, prices have gone up by Rs 2.59 per litre for petrol and Rs 2.82 per litre for diesel. Retail petrol rates have risen by Rs 19.95 per litre since mid-March 2020, after the government raised taxes by a record margin to mop up gains arising from fall in international oil prices. Diesel rates have gone up by Rs 17.66.
Given the middle class sensitivities over what is perceived as a crushing burden in times of pandemic, India, the world's thirdbiggest oil consumer, on Wednesday urged Saudi Arabia and other global oil producers to ease production cuts, saying rising international oil prices are hurting economic recovery and demand. Demand recovery should take "primacy" over oil prices at least for the next few months, Oil Minister Dharmendra Pradhan said.
As petrol sneaked past the ignominious Rs 100 milestone, PM Modi on Wednesday said the middle-class would not have been burdened if the previous governments had focussed on reducing India's energy import dependence. Without referring to the relentless increase in retail fuel prices, which are linked to international rates, he said India imported over 85 per cent of its oil needs in the 2019-20 financial year and 53 per cent of its gas requirement.
"Can a diverse and talented nation like ours be so energy import dependent?" he asked, addressing an online event.
Since India imports most of its oil needs, retail rates are benchmarked to international prices which have been on the boil since Saudi Arabia pledged additional voluntary output cuts of 1 million barrels per day in February and March under a deal between the OPEC and its allies including Russia, a group known as OPEC+. This has resulted in oil prices rising to USD 63 per barrel, the highest level in more than a year.
Opposition parties, including the Congress, have criticised the price hikes, blaming it on the Modi government’s penchant for raising taxes to scoop out the benefit that arose from international oil rates plunging to a two-decade low in April/May last year. Though since then global rates have rebounded with a pickup in demand, the government has not scrapped the taxes, which are at a record high. Central and state taxes make up for 60 per cent of the retail selling price of petrol and over 54 per cent of diesel.