Petrol price peaks 5-year high, inflation looms large

Due to global price surge, the petrol price in six metropolis touched a near-five year high of Rs 73.83 a litre on effective April 1, while Mumbai registered a fresh record high of Rs.81.69 per litre.

In Mumbai, Kolkata, Chennai, Bangalore and Hyderabad, prices of petrol crossed Rs.80-mark for the first time in five years compared to the previous hikes registered in Delhi at Rs 74.10 per litre in September 2013, Mumbai at Rs 81.75 registered in July 2014, Kolkata at Rs 77.88 registered in May 2012 and Chennai at Rs 77.53 recorded in May 2012.

In Delhi, diesel was priced at Rs 64.69 a litre on Monday, follwed by Mumbai at Rs 68.89, Kolkata at Rs 67.38 and Chennai, diesel prices at Rs 68.24. The effect of price surge in diesel will have cascading impact on transportation of food and agriculture products using diesel as fuel. In turn, it may lead to food inflation, said experts.

The overall impact from the increase in global crude oil prices due to the ongoing trade tensions between the US and China and a reduction in American drilling activity point out an irreversible trend where the oil prices may grip the lives of ordinary people in the long run. As of Monday, global brent crude oil was priced around $69.75 per barrel.

After December 2017, food prices pushed India’s retail inflation to a 17-month high, breaching the RBI’s medium-term target for the second straight month and the annual retail food inflation rose 4.96 percent in December from 4.35 percent in the previous month.

Rising inflation due to global crude oil prices remains a major worry for the current Modi government, ahead of the elections next year.