THE BURNING ISSUE

The month of June was a cruel—and disorienting— one for Indian consumers.

- M.G. Arun

For three weeks on the trot, starting June 7, oil marketing companies (OMCs) raised prices of petrol and diesel almost every day. In 22 days, the prices of petrol and diesel, in Delhi, rose by Rs 9.13 and Rs 11.10 a litre—an increase of 13 per cent and 16 per cent, respectively. In a first, diesel became more expensive than petrol (in Delhi), causing worries of higher logistics costs and the cascading effect on prices of essential goods, at a time when the movement of goods was already hit by sundry COVID restrictions. Prices seemed to have finally stabilised in July; on July 7, petrol and diesel were at Rs 80.43 and Rs 80.70 a litre, respectively, in Delhi.

The sharp increase in retail prices of fuel was even more disconcerting because it came at a time when global crude oil prices were range-bound and low (see graphic: Unreal Rise). For much of the three-week period of near-daily hikes in petrol/ diesel prices, crude prices were in the $40 per barrel range, provoking irate questions from opposition leaders on why, on the contrary, lower crude prices had not translated into lower fuel costs for the consumer. Congress leader Priyanka Gandhi-Vadra accused the government of “picking people’s pockets” during a crisis.