Retail price of diesel in Delhi crossed Rs 76/litre mark for the first time in history, mainly on the hefty taxes recently imposed by the Union and state governments. Diesel in Delhi cost Rs 76.43/litre on Thursday, a day after it rose to an all-time high of Rs 75.79/litre.
Retail rates of auto fuels have been raised for the 12th day in a row as state-run oil-marketing companies (OMCs) revive their marketing margins. Petrol, on Wednesday, cost Rs 77.81/litre in the national capital still lower than its highest of Rs 84/litre on October 4, 2018. Prices are high even though current rate of $38.4/barrel for Indian basket of crude is less than half of October 2018 levels.
Auto fuel rates have been rising continuously since June 6, when diesel and petrol were priced Rs 69.39/litre and Rs 71.26/litre, respectively. Analysts pointed that prices will likely rise further if OMCs want to maintain their marketing margins to Q4FY20 levels as global crude rates gradually revive.
Union and state government taxes comprise the highest proportion of retail petrol-diesel rates. Of the retail diesel rates, excise duty comprise about 42% and state VAT another 23%. The base price of diesel charged by OMCs had increased to `22.93 on June 16 from Rs 18.49 on June 1.
ICICI Securities had pointed that net marketing margin of OMCs had slipped into the red at minus Rs 1.28/litre on June 6, and has surged to comfortable levels due to retail price hikes.
The marketing margins of the OMCs had taken a hit after prices remained unchanged for about a month to accommodate the sharp Rs 10-13/litre rise in central government’s auto fuel taxes in early May.
Diesel prices are high also because the Delhi government, taking a cue from the Centre, had increased the value added tax on diesel to 30% from the previous rate of 16.8%.