A litre of petrol in Mumbai now costs twice that in New York

Petrol (gasoline) prices have gone past the century mark for the first time ever in India’s financial capital of Mumbai. This makes it among the costliest in India and almost twice the price of its equivalent in New York.

Retail prices in the city are up 11 percent this year and reached Rs 100.47 ($1.39) a litre on May 31, according to data from Indian Oil Corporation (IOC). The equivalent price in the US financial centre of New York is $0.79, as per Bloomberg calculations based on figures from the New York State Energy Research and Development Authority.

Diesel prices have also risen to Rs 92.69 per litre in Mumbai.

Fuel prices in India have soared in the past 12 months even as the COVID-19 pandemic raged, as the government repeatedly raised sales taxes to factor in the scenario of worsening public finances. Now, such levies make up around 60 percent of the retail price and such taxes on petrol and diesel have surged nearly six-fold since 2013.

India is the world's third largest crude importer and these two fuels (petrol and diesel) account for more than 50 percent of India's oil consumption.

India levies the highest taxes on petrol and diesel in the world.

In fact, after a long time, petrol and diesel rates have been hiked for the second consecutive day (instead of alternate ones) on June 1. The consolidation in global crude oil rates has resulted in this hike. It is also an indication that government-run oil companies may continue to hike fuel prices for a longer period.

After the hike on June 1, petrol prices topped Rs 101 per litre, while diesel hit Rs 92.69 per litre in Mumbai. In New Delhi, petrol costs Rs 94.49 per litre and diesel Rs 85.39 per litre.

Petrol prices are now retailing in the high 90s in most districts. The highest retail price for petrol is currently in Sri Ganganagar, where a litre costs nearly 105 per litre.

Rising fuel prices could derail economic recovery momentum as demand for other commodities will drop as a result.

Government run oil marketing companies -- IOC, Bharat Petroleum, and Hindustan Petroleum -- revise petrol and diesel prices daily. Oil prices rose on June 1 ahead of an OPEC+ meeting and on optimism that fuel demand will grow in the months ahead. Brent crude futures for August gained 56 cents, or 0.8 percent, to $69.88 a barrel by 0125 GMT. US West Texas Intermediate crude for July was at $67.33 a barrel, up $1.01, or 1.5 percent from May 28 close, according to Reuters.