Nilanjan
Oil markets have been buzzing with anticipation as the industry awaits the potential resumption of Iraqi oil exports, a move that could potentially alleviate the supply tightness caused by the ongoing OPEC+ production cuts. Amidst this backdrop, let’s delve into the recent developments in petrol and diesel prices across various Indian cities as of August 22, shedding light on both steady prices and minor adjustments.
Steady Prices Across Major Cities
Indian oil marketing companies have maintained consistent petrol and diesel prices in major metropolitan areas such as New Delhi, Kolkata, Mumbai, and Chennai. This comes as a relief to consumers who are accustomed to frequent fluctuations in fuel prices. However, it’s important to note that minor revisions have been observed in several other regions, including Punjab, Uttar Pradesh, Haryana, and Bihar.
Delhi: In the nation’s capital, the price of petrol stands at Rs 96.72 per litre, while diesel is available for Rs 89.62 per litre. These figures have remained constant, offering a sense of stability for motorists in the city.
Mumbai: In the bustling financial hub of Mumbai, petrol is being sold at Rs 106.31 per litre, while diesel remains priced at Rs 94.27 per litre. The consistency in prices in a city known for its high living costs is certainly a welcome relief for residents.
Kolkata: Petrol in Kolkata is priced at Rs 106.31 per litre (inclusive of taxes), while diesel is available at Rs 92.76 per litre (including taxes). This stability in prices contributes to a predictable budget for vehicle owners in the city.
Chennai: Moving south to Chennai, the cost of petrol stands at Rs 102.63 per litre, while diesel can be obtained for Rs 94.24 per litre. These figures, remaining unchanged, provide clarity to consumers planning their expenses.
Minor Price Tweaks in Other Regions
While the major cities have witnessed consistent pricing, minor adjustments have been made in various regions:
Amritsar: Petrol prices in Amritsar have seen a minor increase of 2 paise, bringing the cost to Rs 98.76 per litre. Diesel prices in the city have also risen by 2 paise, reaching Rs 89.06 per litre.
Noida: In Noida, petrol has become slightly costlier by 11 paise, reaching Rs 96.76 per litre. Diesel in Noida also experienced an 11-paise increase, reaching Rs 89.93 per litre.
Gurugram: In Gurugram, petrol prices have witnessed a more substantial increase of 52 paise, bringing the cost to Rs 96.66 per litre. Diesel prices in Gurugram have risen by 51 paise, reaching Rs 89.54 per litre.
What Determines the Fuel Prices in India?
The fuel prices in India are determined by various factors, such as:
- International crude oil prices: India imports about 80% of its crude oil requirement from other countries, mainly from the Middle East. The price of crude oil in the international market depends on the demand and supply, geopolitical tensions, natural disasters, and other factors. When the crude oil price goes up, the fuel price in India also goes up.
- Taxes and duties: The central and state governments impose various taxes and duties on petrol and diesel, such as excise duty, value-added tax (VAT), cess, and surcharge. These taxes and duties account for more than half of the retail price of fuel in India. The government uses these revenues for various development and welfare schemes.
- Exchange rate: The exchange rate of the Indian rupee against the US dollar also affects the fuel price in India. Since India pays for its crude oil imports in US dollars, a weaker rupee means a higher cost of crude oil and vice versa.
- Dealer commission: The dealer commission is the amount paid by the oil marketing companies (OMCs) to the petrol pump dealers for selling fuel. The dealer commission varies from state to state and depends on factors such as transportation cost, electricity charges, and employee wages.
What is the Current Situation of the Fuel Market?
According to the Business Today website, Indian oil marketing companies have kept the petrol and diesel prices constant in New Delhi, Kolkata, Mumbai, and Chennai on Tuesday, August 22. However, there were minor tweaks in Punjab, Uttar Pradesh, Haryana, and Bihar.
Here are the current prices of petrol and diesel in some of the major cities in India as of August 22:
| City | Petrol (Rs per litre) | Diesel (Rs per litre) |
| Bengaluru | 101.94 | 87.89 |
| Chandigarh | 98.65 | 88.95 |
| Chennai | 102.86 | 94.46 |
| Ghaziabad | 96.58 | 89.75 |
| Gurugram | 96.66 | 89.54 |
| Kolkata | 106.03 | 92.76 |
| Lucknow | 96.43 | 89.65 |
| Mumbai | 106.31 | 94.27 |
| New Delhi | 96.72 | 89.62 |
| Noida | 96.79 | 89.96 |
The last pan-India revision was done in May 2022, when Finance Minister Nirmala Sitharaman reduced the excise duty on petrol by Rs 8 per litre and Rs 6 per litre on diesel on May 21, 2022. However, since then, the fuel prices have increased steadily due to the rise in crude oil prices and depreciation of rupee.
Recently, Union Minister for Housing and Urban Affairs and Minister for Petroleum and Natural Gas Hardeep Singh Puri said that the government is not planning to reduce fuel prices ahead of the Lok Sabha elections next year. He said that reducing taxes on fuel would affect the government’s spending on welfare schemes.
How to Save Money on Fuel
While we cannot control the fuel prices in India, we can take some steps to save money on fuel by following some simple tips:
- Drive smartly: Avoid sudden acceleration and braking, maintain a steady speed, use cruise control if available, and avoid idling your engine for long periods. These habits can improve your fuel efficiency and reduce your emissions.
- Maintain your vehicle: Keep your tyres properly inflated, change your oil and air filters regularly, and get your engine tuned up as per the manufacturer’s recommendations. A well-maintained vehicle can perform better and consume less fuel.
- Choose the right fuel: Use the fuel grade that is suitable for your vehicle’s engine. Do not use premium fuel if your vehicle does not require it, as it will not improve your performance or mileage. Also, avoid adulterated or low-quality fuel that can damage your engine and reduce your fuel efficiency.
- Plan your trips: Avoid peak traffic hours, use GPS or maps to find the shortest and fastest routes, and combine multiple errands into one trip. This can help you save time and fuel by avoiding congestion and unnecessary detours.
- Use public transport or carpool: Whenever possible, opt for public transport or carpool with your friends or colleagues. This can reduce your fuel consumption and expenses, as well as lower your carbon footprint.
- Switch to alternative modes of transport: Consider using a bicycle, an electric scooter, or a hybrid or electric car for your daily commute or short trips. These modes of transport can help you save money on fuel and maintenance, as well as reduce your environmental impact.
Factors Influencing Fuel Prices
The last nationwide revision of fuel prices occurred in May 2022 when Finance Minister Nirmala Sitharaman reduced excise duty on petrol by Rs 8 per litre and diesel by Rs 6 per litre. However, recent statements from Union Minister Hardeep Singh Puri have indicated that the government does not plan to further reduce fuel prices in the lead-up to the upcoming Lok Sabha elections. Puri explained that the government’s ability to control prices has been limited by the rising global crude oil prices.
Fuel prices are influenced by a myriad of factors, including international crude oil prices, transportation costs, refining expenses, and government-imposed taxes. Contrary to the notion of arbitrary pricing, Puri emphasized that fuel prices are a result of a complex interplay between these variables and government decisions.
Global Crude Oil Market Outlook
The global crude oil market remains in flux as the world monitors developments in Iraqi oil exports and the ongoing OPEC+ cuts. Additionally, the faltering Chinese economy continues to impact the global demand outlook, adding further complexity to the oil market.
As of the latest update, Brent crude is down 8 cents at $84.38 a barrel, and U.S. West Texas Intermediate crude is trading 7 cents lower at $80.65 a barrel. These figures reflect the intricate balance between supply and demand dynamics on the global stage.
Conclusion
Fuel prices are likely to remain high in India due to various factors beyond our control. However, we can take some steps to reduce our fuel expenses and save money by following some simple tips. By driving smartly, maintaining our vehicles, choosing the right fuel, planning our trips, using public transport or carpooling, and switching to alternative modes of transport, we can improve our fuel efficiency and lower our fuel bills.
The stability observed in petrol and diesel prices across major Indian cities offers a sense of predictability for consumers. However, minor adjustments in certain regions highlight the dynamic nature of the fuel market. As the global oil industry navigates through various challenges, consumers and industry experts alike will be closely observing how these factors continue to shape fuel prices in the months ahead.
Thank you for reading!
