Petrol, diesel price restless in India; Here’s how it hits your pocket on monthly basis
Indian petrol and diesel price are at an all time-high. These are the levels never witnessed before even when international crude oil was trading at $100 per barrel during the year 2014.
There seem to be no relaxation when it comes to deciding petrol and diesel prices currently in India. While Indian oil companies have no option but to hike petrol and diesel prices on the back of soaring crude oil prices, the end users aka consumers are facing heat of this rise. Times have changed since fuel prices underwent on daily revision last year in June month. What was suppose to be a good news for customers when Oil Ministry linked fuel purchase with international method of pricing from June 15, 2017, has now started to give sleepless nights to transport users.
Currently, a litre of petrol is available at Rs 79.31 in New Delhi, at Rs 82.22 in Kolkata, at Rs 86.72 in Mumbai and at Rs 82.41 in Chennai. Similarly, a litre of diesel is now available at Rs 71.34 in New Delhi, at Rs 74.19 in Kolkata, at Rs 75.74 in Mumbai and Rs 75.39 in Chennai, as per data on Indian Oil website.
From the above pricing, this means Indian petrol and diesel price are at an all time-high.These are the levels never witnessed before even when international crude oil was trading at $100 per barrel during the year 2014.
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Today, brent crude is trading at $77.72 per barrel down by 0.61%, while WTI crude futures is performing at $69.14 per barrel down by 1.02%. However, both brent and WTI have touched an high of $79.72 and $71.39 since the start of 2018.
While Indian consumers are still trying to understand how their petrol and diesel prices are rising each coming day, their overall monthly expense meanwhile has risen due to such uptick.
Let’s calculate monthly expense of fuel cost for Indian consumers. For example, distance travelled daily in kms is 80 which would be 1840 kms for 23 working days.
If Kms / Litre (Mileage of vehicle) for petrol is 15 and their cost is Rs 86.72 in Mumbai then their daily travel cost for petrol purchase goes to Rs 462.51 and in a month it is about Rs 10,637.73.
(Image Source/ Maruti Insurance)
Similarly, if a Kms / Litre (Mileage of vehicle) of diesel is also 15 and their purchase cost is Rs 75.74 in Mumbai, then on a daily basis a person pays about Rs 403.95 on diesel purchase and on a monthly basis he/she spends about Rs 9,290.85.
If we look at the petrol and diesel rates on January 01, 2018, you will see that the expense on petrol and diesel has risen for consumers currently.
On January 01, 2018, petrol price was at Rs 77.87 per litre in Mumbai, and if we take the same distance and mileage, then on a daily basis a customer that time spended about Rs 415.31 which would take it to Rs 9,552.13 on monthly basis. Taking into consideration the same mileage and distance for diesel price, which was available at Rs 63.35 on the same day, then a customer would pay about Rs 337.87 for diesel on daily basis which would result in Rs 7,771.01 in a month.
(Image Source/ Maruti Insurance)
Thereby, from above example it is cleared that a person expense on petrol and diesel has risen by over Rs 1,000 and Rs 1,500 respectively since the year 2018 began.
From January 01 to till date this year, a litre of petrol has seen rise by Rs 9.34 in New Delhi, Rs 9.5 in Kolkata, Rs 8.85 in Mumbai and Rs 9.88 in Chennai. Interestingly, diesel price has risen by much higher rate than compared to petrol prices. A litre of diesel surged by Rs 11.64 in New Delhi, Rs 11.83 in Kolkata, Rs 12.39 in Mumbai and Rs 12.04 in Chennai.
The gap between petrol and diesel has also been narrowed since start of 2018. If we see current fuel price, the gap between petrol and diesel stands at Rs 7.97 in New Delhi, Rs 8.03 in Kolkata, Rs 10.98 in Mumbai and Rs 7.02 in Chennai.
The gap between petrol and diesel on January 01, 2018, was at Rs 10.27 in New Delhi, Rs 10.36 in Kolkata, Rs 14.52 in Mumbai and Rs 9.18 in Chennai.
Fuel cost in India is derived by taking into consideration the international crude price, Value Added Tax (VAT), excise duty and dealer commission.
While fuel price in India cannot save themselves from international crude oil prices, there are three ways to bring it down either by government cutting excise duty or state trimming their VAT or bringing it under GST regime.
However, looks like government is in no mood to relax their excise duty as recent reports suggest that they have ruled out that scenario as revenue would take hit. While states have been reluctant in giving any relief in case of VAT and Oil Ministry has already urged government for bringing fuel prices under GST, however not much has been said on that front.
So for now, Indian fuel prices continue to rise, and consumers facing the brunt.