Why have petrol prices hit a record high?

Context

• Petrol price in the national capital hit an all-time high of Rs 84.2 per litre. The price of petrol in Delhi previously hit the Rs 84 per litre mark in October 2018 when international crude prices were above $80 per barrel.

What are the current international prices of crude oil and reason behind the price hike?

• Brent crude is currently priced at $54 per barrel, its highest level since the crash in crude oil prices due to the Covid-19 pandemic in March.
• A decision by Saudi Arabia to cut crude oil output by one million barrels per day has also contributed to the hardening of crude oil prices.

Why are prices higher despite lower crude oil prices?

• The key reasons behind the high prices of petrol and diesel despite relatively low crude oil prices are hikes in government levies over the past year.
• A number of state governments also hiked value-added taxes to boost revenues which were hit by low economic activity due to Covid-19 related restriction on movement of goods and people.

Major oil reserves states of India

• The first oil deposits in the country were discovered near the town of Digboi in the state of Assam.
  
  

  The following countries were the 5 largest sources of crude oil imports into India in 2018