Diesel and petrol gas pumps stand at a Hindustan Petroleum Corp. gas station in New Delhi (Photographer: Prashanth Vishwanathan/Bloomberg)

Petrol, Diesel Hover Near Record Highs; Government Hopes It Is Temporary

With petrol and diesel prices going up by almost a rupee per litre within a fortnight, the government today hoped that the rally in global rates is temporary and will decline soon.

Petrol price was today hiked by 13 paisa a litre and diesel by 14 paisa. In Delhi, where fuel is cheapest in all major cities due to lower sales tax, a litre of petrol now comes for Rs 78.18. Diesel on the other hand, touched a new high of Rs 69.75 per litre.

“I earnestly believe that this increase in oil prices is really temporary,” Economic Affairs Secretary Subhash Chandra Garg told reporters. The fluctuations were seen coming, he said. “The crude (oil price) had gone down to the level of $70 per barrel and it is back to $74-75, it should be temporary.”

It is coming out of some countries not able to produce so I hope it remains temporary. We will be able to come back $70-71 per barrel soon
Economic Affairs Secretary Subhash Chandra Garg

Diesel prices this week hit their highest level ever, crossing the previous peak of Rs 69.31 a litre reached on May 29. Petrol rates are however yet to hit the new record high of May 29, when they touched Rs 78.43 a litre in Delhi.

Fuel prices have been on the rise since Aug. 16 after the rupee dipped to its lowest value against the U.S. dollar. The currency hit a fresh record low of 70.59 per dollar today.

Also read: Moody's Sees Risk of India Missing Budget Targets on Costly Oil

India imports bulk of its oil requirement. Petrol price has risen by Rs 1.04 a litre in Delhi in last 14 days and diesel rates have gone up by Rs 1.03 per litre in the same period.