State-owned oil firms have increased the price of cooking gas by Rs 15 per cylinder, while petrol and diesel rates saw their steepest increase in recent weeks, pushing prices to all-time high across the country.
Cooking gas now costs Rs 899.50 per cylinder in Delhi and Mumbai, and Rs 926 in Calcutta, according to a price notification of state-owned fuel retailers. In 2021, the price of a 14.2 kg non-subsidised LPG cylinder has been hiked by Rs 205.50.
The government has through periodic increases eliminated subsidies on LPG in most cities. Domestic household kitchens, which are entitled to 12 cylinders of 14.2-kg each at subsidised rates in a year, and Ujjwala beneficiaries, who got free connections, now pay the market price.
A 5-kg LPG cylinder now costs Rs 502.
The price of LPG sold by Saudi Arabia has gone up steeply, from $483 a tonne in May to $797 in October.
Fuel rates
The price of petrol was increased by 30 paise per litre and diesel by 35 paise a litre. This is the steepest daily increase in recent weeks and follows international oil prices touching a seven-year high.
The petrol price in Delhi rose to its highest-ever level of Rs 102.94 a litre and to Rs 108.96 in Mumbai, the notification showed. Diesel rates too touched a record high of Rs 91.42 in Delhi and Rs 99.17 per litre in Mumbai.
Petrol now costs Rs 103.65 per litre in Calcutta and Rs 100.49 per litre in Chennai, respectively.
While diesel sells for Rs 94.53 per litre in Calcutta, it costs Rs 95.93 per litre in Chennai. Prices differ from state to state depending on the incidence of local taxes.?
“The increase in crude oil price in the last few days has been caused by the sharp increase in demand as well as constraints on supply...The oncoming winter season tends to put pressure on prices in normal times too. Of late the power shortage in some geographies especially China has been caused by supply chain issues regarding coal. This in turn has increased the demand for oil,” Care Ratings said.
India imports around 4.5-5 barrels per day which for the second half of the year would be 820-910 barrels. Intuitively $ 10/barrel will mean an increase in the import bill by $ 8.2- $ 9.1 bn for this period. In FY20 the oil bill was $ 130 billion and in FY21 $ 82.4 billion.
In the first 6 months of FY22, oil imports were $ 70.5 billion and hence assuming a similar quantum would be imported in the second quarter there would be an increase in the half yearly bill by 11.6% to 12.9%. This will tend to impact the trade deficit too. The trade deficit for the first half was around $ 75.7 billion, it said.
The share of petrol and diesel is 4.7% in WPI and combined with other products which are related to crude oil would have a weight of 9.62%. The share of petrol and diesel in the CPI is 2.33% while other related products especially for conveyance is 6.33%.
“The pass through of higher prices in the CPI to the transport sector which can in turn have an indirect impact on other commodity prices,” the rating firm said, expressing concern over the inflationary pressure in the economy.
The seventh increase in fuel rates by oil firms since the ending of a nearly three-week hiatus has sent petrol prices above Rs 100 a litre in most major cities of the country.
International oil prices rallied to their highest level since 2014, following a decision by OPEC+ to maintain its planned gradual increase of supply, despite the market facing an energy crunch. Global benchmark Brent jumped to USD 82.92 per barrel, while West Texas Intermediate rose to USD 79.25 a barrel. Being a net importer of oil, India prices petrol and diesel at rates equivalent to international prices. A month back Brent was around USD 72 per barrel.
