State-run fuel retailers cut diesel rates by 20 paise a liter for the third day in a row on Friday, bringing the total reduction to 60 paise since Wednesday, a 0.66 percent drop from the previous high, but kept petrol rates unchanged, despite international oil prices plummeting 3.7 percent in three days due to supply concerns.
Diesel prices have begun to decline on Wednesday, after remaining locked at a 34-day high of 89.87 per liter since July 15. While diesel now costs 89.27 per liter in Delhi, petrol prices have been at a record high of 101.84 per liter for the past 35 days, dating back to July 17.
While the fuel prices at the state-run Indian Oil Corporation (IOC) pumps in Delhi serve as a national standard, retail pricing for the two fuels varies by location due to differences in state taxes and local levies.
International oil prices, which had fallen for the sixth day on Thursday due to concerns over rising Covid-19 cases and increasing crude oil supplies in the market from significant suppliers, recovered slightly in Friday trade. Brent crude, which had dropped more than 2.6 percent to $66.45 a barrel on Thursday, began modestly higher at $66.54 on Friday and was hanging at $66.71 with a 0.39 percent gain.
While international oil prices have an impact on vehicle fuel prices because India imports more than 80% of the crude it processes, hefty taxes are also a factor in high petrol and diesel prices.
According to official data from August 1, central levies account for 32.3 percent of the price of petrol in Delhi, while state taxes account for 23.07 percent. Central taxes on diesel exceed 35.38 percent, while state taxes are around 14.62 percent.
As global crude prices declined through 2020, the central government increased the gasoline excise levy to shore up its budget. States followed suit, losing money as a result of the pandemic. In 2020-21, the petroleum sector provided 3,71,726 crore in central excise income and 2,02,937 crore in state levies or value-added tax, according to official data (VAT).