The elevated pricing was in evidence on August 12, with fresh action at the state level compounding the issue. Himachal Pradesh put a 60 paise per litre widows’ and orphans’ cess in place from midnight, which put the state’s petrol at Rs 102.50 a litre. At the same time, the approach of the $90 level by Brent crude does little to offer relief.
One could say the situation in Himachal is a case study in how a state levy can reset the pump price overnight. It also puts into perspective why the average for a large city is only part of the story when you have rising global oil and a tight rupee-dollar dynamic at play.
What changed on August 12
Officials in Himachal Pradesh signalled a heavier local burden as international benchmarks were on the rise; the new cess covers both petrol and high-speed diesel. For the rest of the country, the day’s revisions followed the usual course: southern cities are at the upper end of the scale while Delhi is cheaper.
Petrol in the major metros on August 12 was as follows:
– Delhi: Rs 102.12 per litre
– Chennai: Rs 107.75 per litre
– Bengaluru: Rs 110.93 per litre
– Hyderabad: Rs 115.69 per litre
– Kolkata: Rs 113.43 per litre
Mumbai too was above Rs 110 for petrol. One might find it quoted at 111.12 or 111.21 per litre in separate updates, a matter of marginal day-to-day tweaking in the city.
Metros: how the pump prices stack up
Of the cities listed, Hyderabad had the steepest petrol rate and Delhi the lower one. The difference is tax-driven for the most part and will be there regardless of whether the supply comes from the same crude market.
With diesel the pattern is much the same: Hyderabad is at the top and Delhi at the bottom. The gap is a clear illustration of what state and local charges do to retail fuel.
Diesel divergence across cities
There was a wide band in diesel prices on August 12. In Delhi the figure was 95.2 a litre, compared to 98.79 in Bengaluru and 99.78 in Kolkata. Chennai was at 99.57, close to the threshold, but Hyderabad put in an appearance at 103.82.
In Mumbai, diesel was under Rs 100, unlike in Hyderabad. Depending on the source, it was put at 97.78 or 99.82 per litre.
Why prices differ and what could move next
More than 85% of India’s crude needs are imported. That makes the domestic price vulnerable to the exchange rate and whatever is happening with international benchmarks. Add in the costs of refining and transport, along with taxes from the Centre and the states, and that is what sets the final pump price.
A weaker rupee and higher crude means import costs go up, putting pressure on inflation and opening the door to more adjustments at home. The recent Himachal cess is just one instance of policy feeding through to the end user.
Global cues: Brent edges toward $90
Oil has been on the upswing this week. After a 1.36% gain on Tuesday to $88.91 a barrel, Brent crude futures were at $89.47, a 0.57% increase. West Texas Intermediate was up 1.3% to $83.20. Put together, prices have jumped over 6% in seven days.
Geopolitics is a factor. Iran’s Mohsen Rezaei has made it plain the Strait of Hormuz will be shut unless Washington accedes to Tehran and unfreezes the funds. On the other hand, Pakistan’s Defence Minister Khawaja Asif says a deal or peace arrangement is looking more likely.
The message for the Indian consumer is unambiguous. With the currency sensitive and state taxes in play, variations from city to city will be pronounced. Unless there is a sustained fall in global oil or some recalibration of taxes here, there is no real prospect of relief.
