New Delhi: Diesel prices hit a new high when average rates in Delhi, Mumbai, Bangalore, Pune, Chennai and Noida recorded Rs 63.14 a litre on Friday.
Price of diesel per litre in Mumbai on Friday was a steep Rs 65.09.
Prices have been rallying since last week.
Fuel prices are now dynamic and unregulated which means prices change on a daily basis based on the crude oil rates and the demand and supply mechanism.
Under dynamic, or real-time, pricing, price of a product can vary as fixed by individual retailers across locations and duration of the day.
Retail fuel prices in the last six months rose by 11 percent during the period even as crude oil prices, jumped 45 percent to a three year high of around $69 a barrel.
According to a report by BP Global, India imports about 80 percent of the oil consumed in the country. Government levies kept the prices high even as price of Brent retreated from $115 a barrel in 2012 to $28 in early February 2016. The fossil fuel began firming up again again on account of production cuts by the Organization of Petroleum Exporting Countries (OPEC) in January last year.
Ministry of petroleum andnatural gas in consultation with the finance ministry on 3 October 2017 lowered excise duty on petrol and diesel by Rs 2 each.
However, the central levy on fuels is still twice of what was charged three years ago.
Demand for petrol and diesel dipped in the calendar year 2017, keeping prices in check. Fuel consumption rose 4 percent in 2017 in comparison with 7 percent growth in each of the previous two years.
Currently, India has 56,190 fuel retail outlets, including state-run and private, which sell petrol and diesel of firms such as Indian Oil Corp. Ltd (IOC), HPCL and Bharat Petroleum Corp. Ltd (BPCL).
The other firms involved in the fuel retail are Numaligarh Refinery Ltd and Mangalore Refinery and Petrochemicals Ltd.
Also, private entities such as Reliance Industries Ltd, Essar Oil (acquired by Roseneft) and Shell India also retail petroleum products.
According to a draft policy by the ministry of petroleum and natural gas, there are three retail outlet models in place—dealer owned dealer operated, dealer owned corporation operated and corporation owned corporation operated.