Petrol touches ₹100/litre in some cities, here’s why it’s so costly

Fuel prices are on the rise again. On Tuesday, petrol cost Rs89.29 a litre in Delhi, while diesel cost Rs79.70 a litre. In some parts of India, for example in Rajasthan and Madhya Pradesh, petrol even crossed the Rs100 mark for the first time.

Part of the reason is recovering crude oil prices, even as central and state taxes remain a pain point. These taxes were raised last year as the pandemic dried up other revenue sources for the government. The elevated taxes kept fuel prices up in India even though crude oil prices had crashed and stayed low for much of 2020.

The current petrol price break-up in Delhi shows 60% of what you pay at the gas station goes as excise duty and value-added tax. Just about 40% is the price of crude oil.