After staying steady in March and April, petrol prices in Delhi, Mumbai, Chennai and Kolkata increased consistently in May. The price of petrol breached the Rs. 100/litre mark in Mumbai while prices in the three other cities were above Rs. 90/litre. A rise in international crude oil prices and high taxation have fueled the increase in pump prices. On average, Indians are now paying the highest prices for a litre of petrol compared to neighbouring countries.
Petrol prices per litre in Mumbai (₹100.19), Chennai (₹95.51), Kolkata (₹93.97), and Delhi — (₹93.94) reached the highest mark in at least four years on Sunday.
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Crude price vs pump price
The chart depicts the petrol price in Delhi (left axis) against the crude price – Indian basket (right axis) between January 2019 and May 2021. Even when crude oil prices were relatively low between April and December last year, petrol prices at the pump rose because of an increase in taxes.
High tax burden
Taxes account for 58.6% of the petrol price in Delhi. The base price decreased by 27% from May 2014 to May 2021. In the same period, taxes, duties and commissions recorded a 139% increase with the Centre’s tax share rising by 216%.
The average price of petrol in India was ₹95.43/litre on May 24 which was the highest compared to the prices recorded in neighbouring countries and countries with comparable economies (converted to rupee terms).