Why Are Fuel Prices Still Spiking Despite Record Fall In Crude Oil Rates?

Amid the Coronavirus pandemic, when the pockets of the people have dried up, then the prices of petrol and diesel are continuously spiking.

In the last seven days, the price of petrol-diesel has increased by about Rs 4. In Mumbai and Bhopal, one litre of petrol is being sold at Rs 82.

The reason for the continuous spike in the fuel prices is the daily revision of petrol and diesel rates by oil companies on the basis of the price of crude oil in the international market.

No respite for the common man as #petrol and #diesel prices mark the seventh straight hike. After the latest revision, petrol in #Delhi cost Rs 75.16 per litre, while diesel is at Rs 73.39 per litre. In the last seven days, the #fuelprices have gone up by Rs 4 per litre pic.twitter.com/bubg7KABiQ

— GoNewsIndia (@GoNews_India) June 13, 2020

However, statistics show that despite the record decline in the price of crude oil, the prices of petrol-diesel did not fall in that proportion.

On January 1 this year, the price of crude oil was $65 per barrel, then in Delhi, a litre of petrol cost Rs 75.18 while diesel is at Rs 68.

In May, the price of crude oil was at $31 per barrel, then one litre of petrol in Delhi cost Rs 69.59 while diesel was at Rs 62.29.

It is to be noted here that in the international market, the price of crude oil fell to record low but the oil companies did not reduce the prices of petrol and diesel.

On June 13, the price of crude oil was recorded at $36.56 per barrel, then petrol in Delhi cost Rs 75.16 per litre and diesel at Rs 73.39 per litre.

The question arises, when the price of crude oil tumbles, why don’t the oil companies reduce the price of petrol and diesel in the same proportion?

Does it imply that the Government wants to fill its treasure with the common man's pocket even during the period of lockdown and recession?