The continuous fall in the value of the rupee has taken its toll on fuel prices which are on an upward curve.
The prices of petrol moved up to Rs 80.58 per litre in Bengaluru on Tuesday, showing a rise of 2.3% within one month from Rs 78.77 on August 1.
Throughout August, petrol prices jumped 18 times in the city, while remaining constant on six occasions. During the month, they saw a drop only on one occasion on August 13 to Rs 79.65 per litre from Rs 79.74 a litre.
As the markets are seeing a spike in petrol prices, petrol pump owners are of the opinion that the prices will touch Rs 90 a litre mark soon. “I have been in this industry for 50 years now. I am sure petrol prices in the city will cross the Rs 90-mark in the next couple of months, and diesel will touch Rs 80,” said a manager of a petrol pump in the city.
Exactly a year ago, (August 29, 2017), petrol prices in the city stood at Rs 70.19 a litre. On a year-on-year (Y-on-Y) basis, petrol prices in the city jumped by 14.8%.
On the other hand, diesel prices in the city stood at Rs 71.89 a litre, up 2.79% from Rs 69.94 a litre at the end of July 2018. On a Y-on-Y basis, diesel prices have shot up by 25.95% from Rs 57.08 per litre, a year ago.
Experts attribute the spike in petrol prices to the depreciation in the rupee value.
“Since most of our crude oil is imported, the depreciation in rupee will make fuel prices go up. The only way the government can control prices is by reducing the tax rates or increasing subsidy. But given the volatility in the crude oil market, the government doesn’t seem to be in a mood to tinker with the fiscal deficit position,” noted economist Govinda Rao told DH.
The rupee was pegged at Rs 70.12 against the US dollar on Tuesday.
Meanwhile, petrol pump owners are wary that any sudden drop in petrol prices might cause them huge losses.
“On the GST rollout day last year, since prices dropped, and I had stock of fuel with me, I witnessed a loss of Rs 2.5 lakh in a single day. It might happen again,” one of the owners of a petrol pump told DH.