Petrol, diesel prices hiked by ₹3 per litre, Pg1

Key Highlights:

• Petrol and diesel prices increased by ₹3 per litre across all variants on Friday.
• This is the first major hike since March 2022.
• Regular petrol in Delhi now costs ₹97.77 a litre, and diesel is at ₹90.67 a litre.
• CNG prices also rose by ₹2 per kg.
• The Centre imposed a windfall gains tax of ₹3 a litre on petrol exports.

Detailed Insights:

• The price hike aims to alleviate losses for Oil Marketing Companies (OMCs) due to global price and supply pressures from the West Asia conflict.
• Minimal increases have occurred periodically since March 2022, but no major hikes until now.
• The government has highlighted that OMCs face losses of approximately ₹1,000 crore daily from petrol, diesel, and LPG due to high global oil prices.
• Experts estimate that a ₹10 per litre hike is needed to cover half of the under-recoveries faced by OMCs.
• The windfall tax on petrol exports was imposed alongside reduced levies on diesel and aviation turbine fuel.
• Opposition parties have criticized the timing of the price hike, which occurred shortly after state election results.
• Prior to the hike, OMCs faced under-recoveries of around ₹13-15 per litre for petrol and ₹17-18 per litre for diesel.

Key Concepts Involved:

• Oil Marketing Companies (OMCs): Companies involved in the refining, distribution, and marketing of petroleum products.
• Windfall Tax: A tax levied on sudden, unexpected profits, often in the energy sector.
• Under-recoveries: The difference between the cost of production and the selling price of fuel, borne by OMCs.