Fuel prices recorded a seventh consecutive hike on Sunday, taking the total increase over the past week to more than Rs4 per litre. Petrol and diesel prices are continuously becoming expensive for the common man with oil marketing companies (OMCs) raising the fuel prices frequently.

In the national capital, led by Chief Minister Arvind Kejriwal, petrol price rose by62 paise on Sunday to Rs75.78 per litre, and that of diesel by 64 paise to Rs74.03 per litre.

Since the dynamic price revision resumed on June 7, prices of petrol and diesel have increased by Rs4.52 and Rs4.64 per litre respectively.

Fuel prices in the other metro cities have also increased on similar lines since the oil marketing companies (OMC) resumed the dynamic pricing system for daily revision of fuel prices after over 83 days of break during the nationwide lockdown.

In Mumbai, Chennai and Kolkata, petrol was priced at Rs82.70, Rs79.53 and Rs77.64, higher from Rs82.10, Rs78.99 and Rs77.05 per litre respectively.

Diesel prices in these cities were Rs72.64 (Mumbai), Rs72.18 (Chennai) and Rs69.80 (Kolkata), compared with Rs72.03, Rs71.64 and Rs69.23 respectively on Saturday.

The increase in prices varies across metros, depending on the tax structure on products in various states.

Prices of transportation fuel were halted under the dynamic pricing policy after March 16 and post that there were few instances of price hike only when the respective state governments hiked VAT or cess.

In a bid to increase revenues during the nationwide lockdown, several state governments raised taxes imposed on transportation fuel.

Already, the gap between cost and sale price of petrol and diesel for OMCs reached around Rs5-6 per litre. If this has to be covered over a period of time, given there is no further increase in global prices, auto fuel prices may be increased by 40-60 paise per day for a few more days to cover the losses.

The increase in retail prices under daily price revision would largely depend on prevailing oil prices and the global oil market at the time.

However, the lockdown has also decreased the demand for auto fuel. This could maintain some check on prices.

Raising retail prices has become important for OMCs now as the recent steep excise duty hike without a resultant increase in petrol and diesel prices had substantially brought down its marketing margins from record-high levels of Rs 12-18 per litre.

If OMCs are unable to raise prices when the global crude prices are rising, they would start incurring losses that will get steeper.

The state-owned Oil India Limited (OIL) lost 638 MT of crude oil production from 66 producing wells and 0.46 MMSCMD of natural gas from three gas wells due to blockades by the local people and various students organisations in two districts of Assam, an OIL official said.

Meanwhile, the Indian government has restricted imports of tyres used for cars, buses, lorries and motorcycles, including radial and tubeless, in a move aimed at curbing imports and boosting domestic companies.

In all the categories, imports have been restricted and will need permission. So, even after paying the customs duty, imports are not freely allowed from other countries. The rules were notified by an amendment in the import policy of pneumatic tyres by the Directorate General of Foreign Trade (DGFT) under the Union Commerce Ministry.

Any goods under the restricted category means an importer would require a licence or permission from the DGFT for imports. Given the procedures and permissions, these measures have the effect to dissuade imports.

Before the new policy, imports of tyres were allowed without any restrictions. The government recently pitched for ‘Aatmanirbhar Bharat’ pitch and coined the ‘Go Vocal for Local’ slogan in a bid to make India self-sufficient in the post Covid phase.

Indian tyre manufacturers have been demanding restrictions on imports from China and other destinations.

The restrictions are on imports of tyres used in station wagons, racing cars, scooters, multi-cellular polyurethane tubeless tyres, and bicycles. Imports of these tyres were worth $260.72 million in April-February 2019-20 as against $330.72 million in the same period in 2018-19.

With demand slumping during the lockdown due to the Covid pandemic, domestic companies are seeking measures to boost manufacturing which will also enhance employment opportunities.

Seperately, automobile major Tata Motors on Saturday said that JT Special Vehicles (JTSV) will become a wholly-owned subsidiary of the company.

Indo-Asian News Service