Fuel prices continue to surge after a day's halt

Fuel prices, after a day's halt, resumed its northward march on Thursday with petrol being sold at Rs 79.51 per liter and diesel at Rs 71.55 per liter in the national capital breaking all previous record highs.

The petrol price surged by 20 paise from Rs 79.31 and the hike in diesel price was of 21 paise from Rs 71.34 per liter, according to the Indian Oil Corporation (IOC). Fuel prices had risen consecutively for 10 days till Tuesday.

The surge in fuel prices is largely attributed to the rise in crude oil prices and high excise duty in the country. The recent slump in the rupee has also lifted the import cost of crude oil, subsequently affecting the fuel prices.

In Mumbai, the petrol price rose by 19 paise to Rs 86.91 per liter and diesel price shot up by 22 paise to Rs 75.96 per liter. In two other metropolitan cities of Chennai and Kolkata, the hike in fuel prices has been between 19 and 22 paise.

While petrol price went up by 21 paise to Rs 82.62 per liter in Chennai, it was up by 19 paise to Rs 82.41 a liter in Kolkata. Diesel price in Chennai went up by 22 paise to Rs 75.61 a liter and in Kolkata, it rose by 21 paise to Rs 74.40 a liter.

On Wednesday, Finance Minister Arun Jaitley said that there was no need for a "knee-jerk" reaction to the rising prices of global crude oil.

"These are not situations which merit knee-jerk and panic reaction. There is no straight-line movement in global oil prices," Jaitley said and added that crude oil prices edged higher in April and May whereas they calmed down in June and July.

However, since the start of the calendar year, the petrol price in Delhi has gone up by 13.6 percent from Rs 69.97 on January 1, 2018. The hike in diesel price has been even steeper. It has gone up by 19.8 percent since January 1, 2018, when it was Rs 59.70.

Recently, geopolitical factors such as trade war fears, upcoming Iran sanctions and conflicts in the Middle East along with supply-side constraints have led to a sharp increase in global crude oil prices.

The rise in global crude oil prices pushes the domestic cost of petrol and diesel higher as the country is a net importer of crude oil.