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Petroleum product’s sales dropped but the prices are still soaring

Petrol and diesel sales hit seven month low but the prices are steadily increasing after the assembly election.

Sales of petrol — used in cars and motorcycles — fell to 2.14 million tonnes in April, the lowest since August, according to the preliminary data of state-owned fuel retailers. Due to the second wave of covid in the country, and partly the local restrictions, the sales of fuel have dropped significantly. “At the end of April, overall fuel demand is down by about 7 per cent from the pre-Covid level of April 2019,” Arun Singh, Director for Marketing and Refineries at Bharat Petroleum Corporation Ltd (BPCL), said. 

India observed one of the strictest national lockdowns last year. After the fall in the number of cases, it was predicted that the country will bounce back in the sector of economic activities. It didn’t seem to look like that. The second wave has gripped the country hard and it is facing multiple difficulties. Indian authorities are scrambling for vaccines, medicines and oxygen as the nation faces its worst health crisis. The number of daily coronavirus cases in India slipped slightly, a day after becoming the first in the world to cross the 4 lakh mark. 

Sales of petrol used in cars and motorcycles fell to 2.14 million tonnes in April, the lowest since August, according to the preliminary data of state-owned fuel retailers. Demand for diesel, the most used fuel in the country fell to 5.9 million tonnes in April 2021, down 1.7 per cent from the previous month and 9.9 per cent from April 2019. Diesel sales in April 2020 were 2.84 million tonnes. With airlines continuing to operate at less than capacity, jet fuel (ATF) sales in April were 377,000 tonnes, down 11.5 per cent over March 2021 and 39.1 per cent over April 2019. Jet fuel sales in April 2020 were 5,500 tonnes. Sales volume of cooking gas LPG fell 3.3 per cent to 2.1 million tonnes in April 2021 when compared with the previous month. The sales were 11.6 per cent higher than 1.88 million tonnes in April 2019.

Even after this, the petrol prices are nearing the 100 mark in Mumbai. Petrol and diesel prices: The price of petrol in Delhi currently stands at Rs 92.05 per litre while diesel is now selling at Rs 82.61. In Mumbai, petrol costs Rs 98.36, while diesel is retailing at Rs 89.75.

This is the seventh hike in fuel prices this month. The prices were hiked for four straight days last week which erased all the reduction in auto fuel rates that came during the four revisions between March 24 and April 15, after this, the retail rates were steady during the weekend (Saturday-Sunday) before resuming their upward journey from Monday. So far this month, petrol price has increased by Rs 1.65 per litre and diesel has climbed by Rs 1.88 in New Delhi.

Petrol and diesel prices differ from state to state depending on the local taxation (VAT) and freight charges. Apart from this, the central government charges an excise duty on auto fuels. The central and state taxes make up for 60 per cent of the retail selling price of petrol and over 54 per cent of diesel. Centre levies Rs 32.90 per litre of excise duty on petrol and Rs 31.80 a litre on diesel. Generally, petrol and diesel prices are revised daily in line with benchmark international crude prices and foreign exchange rates. In the international market, oil prices rose on Wednesday, extending overnight gains, after industry data showed a drop in US crude inventories, which reinforced OPEC’s robust demand outlook, and as the shutdown of the biggest US fuel pipeline headed into the sixth day, news agency Reuters reported earlier today. US West Texas Intermediate (WTI) crude futures rose 21 cents (0.3 per cent) to $65.49 a barrel at 0013 GMT, adding to a 36 cent rise on Tuesday. Brent crude futures climbed 15 cents (0.2 per cent) to $68.70 a barrel, adding to a 23 cent gain on Tuesday, the report said.

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