Fuel prices remain unchanged on Wednesday as global crude oil prices got weaker. However, the State-run oil marketing companies (OMCs) have managed to keep fuel rates static for consecutive 25 days.
International oil prices remained steady for over a week on concerns of rising cases of covid-19 across the world. Several oil-producing countries are worried that demand might be hit due to the increase in covid-19 cases.
While rising global cases have led to lower crude oil prices, the price of diesel and petrol prices remain unchanged. Also, state-run oil companies are expected to cut oil prices due to a reduction in global oil prices.
It seems that oil marketing companies want to ensure that there is no fluctuation in fuel prices in the international market. In Delhi, the petrol is retailing at Rs. 101.84 per litre, whereas in Mumbai, it is Rs. 108. The petrol prices remain above Rs. 102 in Kolkata and Chennai.
Diesel prices also retailing at Rs 89.87 per litre in Delhi and over Rs 97 per litre in Mumbai. In major cities of the country, the diesel prices remain above Rs 90 per litre.
Increase In Fuel Prices Hurting Economy
Experts say that a constant increase in fuel prices may hurt economic recovery in the long run as inflation will rise. However, a recovery in demand has been noticed after the Covid-19 second wave. It should also be noted that higher diesel and petrol prices have a tumbling impact on the value of several goods and services.
The Indian government has cleared that it is not in a position to cut down the excise duty for diesel and petrol. Previously, excise duty was raised in 2020 as Covid-19 hit the country. It can be said that India levies the highest taxes on diesel and petrol.
Additionally, state governments also decided against reducing value-added tax (VAT) collected on fuel, citing the current economic condition. Thus, in this scenario, fuel prices may only fall if international crude oil prices fall.