Why Mumbai pays more than any other city for petrol

Mumbai, India’s financial hub, is currently paying more for petrol than any other Indian city. The city that contributes the maximum to the national exchequer ends up paying the most for travelling to work.

The prices rose for the 15th consecutive day on Monday with the city paying as high as Rs 86.08 per litre from the previous Rs 85.93 per litre rate. The diesel rates also rose by 28 paise, to Rs 73.64 per litre.

Though the fuel prices have witnessed continuous surge since Karnataka elections, the rise has become more painful today as crude prices have fallen by close to 8% and rupee has appreciated by 0.5% over the weekend, making the cost of the basic raw material cheaper by nearly 9% for oil companies.

However, what is to be noticed that it is not the basic price of oil that is going up. The basic price accounts for only 44.73% (or Rs 38.51). Of the remaining 54% (or Rs 48), 22.63% is the central government excise and nearly 29% (or Rs 24.90 per litre) is charged by the state government.

India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for about 40-50 percent of pump prices.

The country is particularly at risk from stronger global crude oil prices because it is the third biggest importer of the commodity, buying about 80 percent of its oil needs.