Bhubaneswar: After 48 hours of fuel stations running dry across Odisha, Friday morning brought the inevitable: the end of a four-year price freeze. Petrol prices have been hiked by Rs 3 per litre, but while the increase hits consumers' pockets immediately, the underlying arithmetic suggests this is merely a "down payment" on a much larger debt.
When global crude costs are translated into rupee terms, the gap between what oil companies pay and what consumers pump becomes impossible to ignore.
The Crude Reality: Breaking Down the $100 Barrier
According to the Petroleum Planning and Analysis Cell (PPAC), the Indian Basket of crude oil stood at $108.36/bbl on May 14. While this is a slight dip from April’s average of over $114/bbl, it remains firmly above the "psychological barrier" of $100.
Taking the PPAC’s projected May average of $106/bbl, the core calculation reveals the pressure on the Indian rupee:
· Indian Basket Crude (May): $106 per barrel
· Exchange Rate Assumption: Rs 95/$
· Rupee Equivalent: around Rs10,070 per barrel
· Base Cost of Crude: Rs63 per litre
From Crude to Petrol: The Cost Build-Up
The journey from a barrel of oil to a litre of petrol involves several layers of added costs. Even before the government takes a share, the price escalates quickly:
· Base Crude Cost: ₹63/litre
· Refining, Freight, & Dealer Commission: Adds approx. ₹10–11
· Pre-Tax Petrol Price: around Rs73–74/litre
· Taxes (Central Excise + VAT): These add an additional 45% to 55% to the cost.
This structure pushes the "fair market price" well into the Rs 105+ range, even before accounting for the massive losses oil companies accumulated during the price freeze.
Current Prices in Odisha (Post-Hike):
· Bhubaneswar: Rs 104.19
· Cuttack: Rs 105.19
· Jagatsinghpur: Rs103.85 (Cheapest in the state)