keywords – Petrol prices, price hike, petrol, fuel, Tax Hike

Written By – Simran Chandel

Petrol prices went as high as Rs 115 Per Liter In Maharashtra!

Why are petrol and diesel prices in India so high?

As the world’s 3rd  crude oil consumer in the world, crude oil fuels many Indian dreams. With a consistent rise in global fuel prices, abominable taxes on fuel (160%) and political for-profits, Indians are now paying 3 digit figures per liter for fuel. Fuel prices have changed by 30% over the last year:

Petrol Price in Indian Metro Cities & State Capitals on a given day

Why are Indians paying so much for petrol and diesel?

As per , India imported 198.11 million tones of crude oil in 2020-2021 and produced 31 million tonnes of fuel. As India imports the majority (80%) of its fuel and has not found enough oil fields of its own, India pays an extreme price.

India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil. As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices.

In 2020, OPEC nations like Iraq (47 mn), Saudi Arabia (38 mn), United Arab Emirates (22 mn), Kuwait (9.9 mn) along with USA (10.7 mn) helped India with fuel. As on October 21 this year, the cost of an oil barrel in the international market (WTI crude) touched Rs 39/litre, whereas in October 2020 the price was Rs 19/litre. So why are Indians paying Rs 111 for the same?

As per  diesel as compared to the  (20%), the UK (62%), Italy and Germany (65%). The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.

Here is an approximate break-up (in Rs):

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