Inflation Risks
As we move into the second half of the fiscal year, the Reserve Bank of India’s (RBI) forecast of a 4.5 per cent average inflation rate brings some optimism.
Petrol and diesel prices were raised across the country on Friday, marking the fourth consecutive increase.
Petrol price in the national capital was hiked by 29 paisa a litre while the diesel rates were raised by 35 per litre. With this latest jump, petrol and diesel rates in the city have gone up to Rs 88.14 a litre and Rs 78.38 a litre respectively.
Across the country as well, The petrol prices increase within the 25-30 paisa per litre range, while diesel between 30-35 paisa per litre, depending on the level of local taxes on the two petroleum products.
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Petrol prices in Mumbai remained close to Rs 100 as its retail prices now are Rs 94.64 a litre. Diesel is also the most expensive in Mumbai at Rs 85.32 a litre.
In Chennai and Kolkata petrol price was at Rs 90.44 a litre and Rs 89.44 per litre respectively.
Similarly, diesel rate in Chennai is at Rs 83.52 a litre and Rs 81.96 per litre in Kolkata.
The latest increase in automobile fuel prices comes in the backdrop of rise in Brent crude oil price as it continues to hover close to $61 a barrel mark.
In India, the current price rise is largely on account of steep increase in central taxes of petrol and diesel and firm crude prices. The budget has also imposed a new agriculture infrastructure and development cess. Oil minister Dharmendra Pradhan has ruled out any cut in duty on petro products.
Though firming of global crude and product price is the reason for the increase in the retail prices of petrol and diesel, it is interesting to note that even though crude has been hovering just over $55 a barrel for a long time, OMCs had gone in for both a pause in price of auto fuels as well increase in its retail prices on consecutive days.
Crude price has remained firm for last few weeks in wake of unilateral production cuts announced by Saudi Arabia and a pick up in consumption in all major economies globally.
The petrol and diesel prices have increased 16 times in 2021 with the two auto fuels increasing by Rs 4.43 and Rs 4.51 per litre, respectively so far this year.
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