on 9th June, petrol available per liter 96.72 in the national capital, while the price is 106.03 in Kolkata 111.35 in Mumbai, and 102.63 in Chennai.
In addition, one liter diesel available on 89.62 in Delhi, the price was 92.76 in Kolkata, 97.28 in Mumbai, and 94.24 in Chennai.
According to Goodreturns, among the metro cities, Mumbai has the highest petrol rate, while Hyderabad has the most expensive diesel.
By how much did Finance Minister Nirmala Sitharaman cut excise duty on petrol last month? 8 per liter and by diesel 6 per litre.
Oil Marketing Companies (OMCs) BPCL, HPCL and IndianOil revise fuel prices on a daily basis taking into account international crude oil prices, excise duty, value added tax (VAT), dealer commission and freight charges.
In its latest treasury research note, HDFC Bank expects CPI inflation to be 6.9% in May this year. The bank expects inflation to remain above the RBI’s upper target of 6% by the end of December. However, the bank expects inflation to rise to 4.7% by the end of March 2023.
HDFC Bank said they expect CPI inflation to moderate to an average of 7.3% in H1 FY13 and 6.2% in H2 FY2013, assuming crude oil prices average $105 a barrel in FY13. For the full FY 2013, CPI inflation is expected to average in the range of 6.5-6.7%, assuming a normal monsoon, some moderation in global commodity prices in H2 and higher service inflation.
“Our forecasts also consider the recently announced excise duty cuts on petrol and diesel, though we believe that there is an under-recovery by the Oil Marketing Companies (OMCs),” said the HDFC Bank report.
As per HDFC Bank note, there was under-recovery for petrol and diesel 17 per liter and Taking forward the case of hike in prices of petrol and diesel by Rs 20 per liter, respectively, till June 2, 2022.
Furthermore, HDFC Bank’s treasury report suggests that 50% pass-through of these under-recoveries could mean a 30 basis point increase in inflation, while a 100% pass-through could mean a 55-60 basis point increase in headline inflation. Might be possible. For now, HDFC Bank . assumes less pass-through than
50% scenario.
India’s consumer price index (CPI) inflation has hit an eight-year high of 7.79% in April 2022. Food inflation rose to 8.38% in the month. This will be the fourth consecutive month that inflation has been above the RBI’s comfort zone.
In its bi-monthly monetary policy on Wednesday, the RBI raised the policy repo rate by 50 basis points to 4.9%. RBI is also focusing on the return of housing to ensure that inflation remains within the target while supporting growth.
“However, with further upside risks to domestic pump prices, international crude oil prices remain elevated,” RBI said in its June 2022 policy.
On the assumption of a normal monsoon in 2022 and an average crude oil price (Indian basket) of $105 per barrel, RBI raised the inflation target to 6.7% in 2022-23, with inflation at 7.5% in Q1; Q2 at 7.4%; Q3 at 6.2%; And Q4 at 5.8%, risk evenly balanced.
Following RBI’s policy, HDFC Bank Chief Economist, Abhik Barua said, “The central bank seemed far more concerned about inflation—reflected in an upward revision in its inflation forecast by 100 bps to 6.7% — and a relatively more optimistic impulse on domestic growth.”
“Obviously the RBI is concerned about the broad-based nature of inflation growth and the risk of a second round of impact on inflation expectations. Therefore, the policy rate is likely to rise significantly above pre-pandemic levels, by the close of the fiscal year. 6% till the end,” said Barua.
The Indian government will announce the CPI inflation data for May 2022 next week on June 13.