Wider vaccine roll out, falling Covid cases, increased economic activity and artificial supply restrictions by key producers are boosting oil prices that have risen two-thirds since October. Investment bank Goldman Sachs expects prices to rise to $70 by the second quarter of the year.
State oil companies raised domestic rates of petrol and diesel again by 35 paise a litre each on Tuesday after pausing for two days. In Delhi, petrol now costs Rs 90.93 per litre and diesel Rs 81.32. In Mumbai, prices have risen to Rs 97.34 for petrol and Rs 88.44 for diesel.
Consumers and the political opposition have been demanding the government cut taxes. Central and state taxes have come to account for about 60% of fuel’s retail prices following steep duty hikes last year.
A calibrated unwinding of high taxes on petrol and diesel—in a co-ordinated manner by Centre and states—are critical to contain the further build-up of cost-pressures in the economy, the Reserve Bank of India has said.