Prices increase by over Rs 7 per litre in October
Morung Express News
Dimapur | October 31
With the hike in fuel rates for the fifth consecutive day, diesel prices reached another record high and breached the psychological Rs 100-a-litre mark across Nagaland on October 31.
Dimapur was the last to join the ‘Rs 100-a-litre’ club as diesel cost increased to Rs 100.24 per litre in the district on Sunday.
Diesel prices increased by 0.35 paise across the State on October 31 while petrol got dearer by 0.34 paise as the public sector oil marketing companies (OMCs) continued the upward revision of the fuel prices.
With Sunday’s hike, the retrial prices of both diesel and petrol have increased by over Rs 7 per litre in the State in October alone.
As per the database maintained by The Morung Express based on Indian Oil Corporation Limited’s (OICL) official IndianOil One App, between October 3 and 31, diesel prices has increased by Rs 7.34 in Dimapur while petrol got costlier by exactly Rs 6.74 per litre.
In Tuensang, where fuel is costliest, a litre of diesel increased from Rs 95.90 on October 3 to Rs 103.24 on October 31; during the same period, the retail price of a litre petrol surged from Rs 104.28 to Rs 111.03.
The rates on the app pertain to prices in IOCL outlets, and the cost might be costlier in other PSU and private outlets or in unofficial makeshift retail stores across various locations in the State.
Fuel rates have been constantly rising across India since last year and while the Government of Nagaland dabbled with the tax rates a couple of times in 2020, including the contentious but now revoked ‘COVID-19 cess,’ the fuel rates has been left untouched since February 2021.
On February 22, 2021, with fuel prices rising persistently, the State Government announced cut in tax rates of petroleum products bringing down the petrol prices by Rs 3.07 per litre and diesel marginally by Rs 0.57 paisa. However, prices maintained an upward trend thereafter across India.
Accordingly, while a litre of petrol was going for Rs 89.95 in Dimapur on February 23, the price has now increased by Rs 17.68 per litre on October 31.
Likewise, during the same period, the retail cost diesel has increased by Rs 16.67 from Rs 83.56 to Rs 100.23.
Meanwhile, on October 31, a litre of petrol was retailing above Rs 110 in 7 districts of Nagaland, while it was ‘cheapest’ in Dimapur at Rs 107.64 per litre.
According to IANS news agency, as of October 31, diesel prices have increased on 29 out of the last 37 while the prices of petrol have risen on 26 of the previous 33 days.
The ‘Rs 100-a-litre’ mark
In Nagaland, the cost of petrol first breached Rs 100-a-litre threshold across the State on July 15, with Dimapur joining other districts to the ‘club.’ It first crossed the psychological mark in Kiphire and Tuensang on June 26. Other district follow suit with subsequent hikes and Dimapur was the last to reach the mark on July 15.
After reaching record highs till July 17, there was a lull in upward revision of both diesel and petrol prices till September last week. In fact, prices fall marginally in the State during the intervening period.
The prices, however, maintained a sustained upward trend since then, taking the fuel rates to new record level with each hike.
Accordingly, after petrol, a litre of diesel first crossed Rs 100 in Tuensang, Kiphire and Noklak districts on October 20.
Ten days after, it breached the mark in Dimapur on October 31 and now, diesel is retailing above Rs 100 per litre in all locations in Nagaland.
How is fuel prices determined?
Before 2014, the prices of fuel were regulated by the government. However the government deregulated the pricing of petrol in 2010 and diesel in 2014.
Since then, the state-run OMCs determine the prices of these products base on several factors.
An official statement of the Union Ministry of Petroleum and Gas also informed that the retail prices of fuel are fixed by the OMCs on the basis of 15 days rolling average price of petrol and diesel in the international market while there is also an impact by the rupee dollar exchange rate.
As a result, the prices are affected by the volatility of prices in global oil markets, particularly the Brent crude or Brent blend, one of three major oil benchmarks used by those trading oil contracts, futures and derivatives.
Others factors determine the final retail prices including central and state taxes including cess, dealer’s commission, and freight charges.
As per IOCL’s ‘price buildup’ of fuel prices in Delhi, besides global price impact on base price, retail prices are determined by price charged to dealers (based price + fright etc), excise duty, average dealer commission, and VAT (including VAT on Dealer Commission).
Consequently, prices differ across states in India, and even within a state, there are regional disparities.
In Nagaland, the current tax rate on diesel is ‘16.50% or Rs 10.51 per litre, whichever is higher’ while for petrol and other motor spirits, the rates are ‘25% or Rs 16.04 per litre, whichever is higher.
According to the IANS, crude price has been on a surge rising over three year high level of over $85 a barrel now as global demand remains firm while OPEC+ continues to move slowly on increasing production.
Since September 5, when both petrol and diesel prices were revised, the price of petrol and diesel in the international market is higher by around $9-10 per barrel as compared to average prices during August, it added.
