Fuel cost sees 7% rise since start of dynamic pricing | ET EnergyWorld

KOLKATA: Both petrol and diesel prices in Kolkata have risen by more than 7% since June 16, when the government introduced dynamic pricing of fuel.

Dynamic pricing, according to oil marketing companies, is to ensure the benefit of even the smallest change in international fuel prices can be passed on to dealers and consumers. The daily change of fuel price is also to remove the big hike in rates at the end of every fortnight.

Petrol, which was sold at Rs 68.06 in Kolkata on June 16, is now selling at Rs 72.91 on September 10. There’s been a clear rise of Rs 4.85. Similarly, diesel, which was sold at Rs 56.69 then, was selling at Rs 61.02 on Sunday, with a rise of Rs 4.33. There are more ups and fewer downs in the price change.

The major raw material for petrol is crude oil (called simply ‘crude’). At present, 75% of India’s crude needs are met through imports. And thus, international prices of crude and foreign exchange rates are the base components in determining the price of petrol at home. However, they form only a small component of the retail price, and the final price is determined by a host of other factors. In fact, more than 57% of the retail petrol price per litre goes towards taxes, duties, cesses and dealer margin, explained an Indian Oil official.

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Fuel cost sees 7% rise since start of dynamic pricing, Energy News, ET EnergyWorld.