Fuel prices were hiked sharply on Thursday despite a drop in international crude oil prices. State-run oil marketing companies have hiked petrol and diesel prices by 30 paise and 35 paise respectively.

At the moment, both petrol and diesel are retailing at record high prices across the country. Petrol is retailing at Rs 103.24 per litre in Delhi after the fresh hike, while it has crossed Rs 109 per litre in Mumbai. It costs Rs 103.94 in Kolkata and Rs 100.86 per litre in Chennai.

There are over two dozen cities where petrol is retailing above Rs 100 per litre, with the highest prices in the states of Rajasthan, Madhya Pradesh and Maharashtra. The highest retail price of petrol in India is in Rajasthan’s Sri Ganganagar, where it is retailing at Rs 114.92 per litre

Diesel prices have also been rising sharply over the past few weeks and rates in major cities are now inching closer to Rs 100 per litre. If the fresh round of fuel price hike lasts a few weeks, diesel price will cross the psychological barrier of Rs 100 per litre in many major cities.

It is retailing at Rs 91.77 per litre in the national capital and Rs 99.55 per litre in Mumbai. The price in Kolkata is nearing Rs 95 per litre, and it stood at Rs 96.37 per litre in Chennai. It may be noted that diesel has never been so expensive in the country’s history.

WILL FUEL PRICES RISE FURTHER?

There are high chances that domestic fuel prices will rise further in the wake of rising international crude oil prices. While crude oil rates dipped on Thursday, they have been rising gradually over the past month.

Multiple reports suggest that crude oil prices will rise further by December due to rising demand and limited supply due to slower easing of supplies by OPEC+, which is a group of major oil producing countries and allies.

Experts have categorically stated that rising prices will impact emerging economies that import a large quantity of crude oil. India is one of the largest importers of crude oil in the world.

The country could witness a sharp rise in inflation due to the rising fuel and gas prices in the near term. This could seriously impact economic recovery during the third quarter, considered the crucial period of the year for demand recovery.

Despite the consequences of higher fuel prices, the Centre and state governments have maintained that they will not reduce taxes levied on petrol and diesel. However, such a decision could significantly weaken consumer sentiment and demand, which are key drivers of economic growth.

Considering the present trend of rising crude oil prices and no change in taxes levied on domestic fuel, chances are high that citizens would have to pay a lot more for petrol and diesel in the near future.

Petrol and diesel prices in major Indian cities