As of today, May 29, fuel prices remained unchanged across India. Earlier, on Monday (May 25), there had been a big increase in prices from ₹2.61 to ₹2.71 per litre. The increase, implemented on Monday, was the fourth increase in two weeks. The main reasons for this trend are the ongoing fluctuations in the global energy market and the continuous rise in crude oil prices to high levels.
**Why is there this difference in prices?**
Petrol and diesel prices vary from city to city as states impose different value-added tax (VAT) rates and local cesses (such as green cess). As shown in the list above, petrol prices are currently the highest in Hyderabad, while prices in Delhi are much lower than other major metros.
**Why have the prices been kept stable?**
Due to slight reduction in tension in West Asia, there has been a slight decline in the prices of Brent crude oil in the international market, which has provided some relief to the domestic oil companies. Fuel prices at the pump are determined by a combination of global, economic and domestic factors. At the heart of this mechanism is the international price of crude oil – the basic feedstock for both petrol and diesel – and which has the greatest impact on the final price consumers pay.
Given India’s heavy dependence on crude oil imports, the rupee-dollar exchange rate is also another important factor. When the rupee weakens against the dollar, the cost of purchasing crude oil increases; Its direct effect comes in the form of increase in retail fuel prices.