Fuel rates at record high: Why petrol, diesel prices are surging

As the fuel prices are sky-rocketing, the government has said that it is looking at various ways to keep the rates in check. "The Centre is sensitive towards the rising fuel prices. Various alternatives are being explored. I hope something will work out soon," Oil Minister Dharmendra Pradhan told reporters in Bhubaneswar.

Prices at the pump have surged on the back of rallying international markets for crude oil, which last week hit their strongest since late-2014 amid ongoing production cuts led by the Organization of the Petroleum Exporting Countries (OPEC).

India is particularly at risk from stronger global prices for crude oil as it is the third biggest importer of the commodity, buying about 80 per cent of its oil needs.

With rising crude prices and a depreciating rupee, petroleum is bound to get more expensive. Diesel had already reached its all-time high and petrol too, at Rs 76.24 per litre in Delhi, hit a new high on Sunday, breaking its September 2013 record. TOI analyses petrol prices:

In the last 16 years petrol, reached the highest price of Rs 76.06 per litre in Delhi on September 14, 2013. The next four highest prices were reached in May 2018 + . The present price of diesel, on the other hand, is the highest ever in this 16-year period.

Petrol, diesel prices continue to surge post Karnataka pre-poll hiatus

The surging trend in fuel price, which started soon after the Karnataka polls, continued on Friday. The prices of petrol and diesel have been increased by 29 paise per litre.

In the National Capital, the petrol price has been hiked to Rs 75.61 per litre from Rs 75.32 while diesel rates were increased to Rs 67.08 per litre from Rs 66.79, according to a price notification issued Indian Oil.

Petrol prices remain highest in Mumbai at Rs 83.45 per litre with the surge of 29 paise. Diesel price touched Rs 71.42 per litre in the financial capital.

These tally came a day after a brokerage firm asserted that Rs 4 per litre increase in petrol and diesel prices is in the offing if state-owned fuel retailers are to return to pre-Karnataka poll hiatus margin levels.

Soon after Karnataka polled to elect a new government, state-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp (HPCL) and Bharat Petroleum Corp (BPCL) on Monday ended a 19-day hiatus in revising petrol and diesel prices and reverted to the practice of changing rates on a daily basis.

"Our computation suggests that downstream oil marketing companies (OMCs) are required to increase retail prices of diesel by a steep Rs 3.5-4 a litre and gasoline (petrol) by Rs 4-4.55 per litre in the coming weeks to earn normative gross marketing margins of Rs 2.7/litre," Kotak Institutional Equities said in a report.