Fuel prices were unchanged on Friday as global crude oil prices remain volatile amid rising Covid cases in some parts of the world and subsequent concerns over demand. Petrol and diesel prices in the country have not been changed for 27 days.

Petrol price in Delhi remains unchanged at Rs 101.84 per litre and nearly Rs 108 per litre in Mumbai. In Kolkata and Chennai, petrol costs over Rs 102 per litre. There are over two dozen cities where petrol is retailing at over Rs 100 per litre.

Diesel prices also remain high as state-run oil companies continue to retail high petrol and diesel prices. It is retailing at Rs 89.87 per litre in the national capital where the rate is the lowest among most other cities. The price of diesel has crossed Rs 90 in all major cities in the country.

While global oil prices remain volatile, state-run oil marketing companies (OMCs) have not yet reduced rates. It is likely that OMCs are awaiting a favourable situation where global oil rates see a further dip.

Read | Fuel prices unchanged for nearly 3 weeks as global oil rates rise

LONG WAIT FOR FUEL PRICE REDUCTION

The long wait for a fuel price reduction is neither helping citizens nor the economy, which has rebounded but still faces the risk of being overrun by factors like inflation and demand stagnation.

Experts have raised concerns several times over record fuel prices in the country, claiming that it could significantly slow down economic recovery in the long run after a period of heightened demand after the pandemic.

While retail inflation in July fell below 6 per cent for the first time in three months, higher oil prices could trigger an increase as companies may have no choice but to hike prices of manufactured goods.

Fuel prices are unlikely to see any significant reduction if the government does not cut high excise duty levied on fuel. Many government officials have said that excise duty reduction may not be possible at the moment due to high expenditure towards Covid relief measures and mass vaccinations.

Even state governments have declined the prospect of cutting value-added tax (VAT) on fuel prices. In such a scenario, only OMCs can provide some respite by reducing petrol and diesel prices as part of daily revision.

Fuel rates in Indian cities: