Retail fuel prices across major Indian cities remained steady on October 1, continuing to exhibit sharp geographical variations driven by differing state taxes and transportation logistics. On the same date, the central government executed its fortnightly revision of windfall taxes on domestically produced crude and outbound petroleum shipments. Under the updated notification, the levy on diesel exports was trimmed, while petrol was left unchanged. Conversely, outbound shipments of aviation turbine fuel saw an increase in export levies. These fiscal adjustments come against a backdrop of tight physical crude supplies globally, even as transit lanes witness a partial rebound.
Revision in Windfall Levies and Special Excise Duty
Under the revised tax framework, the export levy on diesel has been reduced to Rs 16 per litre, down from the earlier Rs 20 per litre. This updated rate remains effective for the current two-week assessment cycle. Alongside this reduction, the special additional excise duty on diesel remains pegged at Rs 0.5 per litre for the upcoming fortnight. Windfall tax on petrol exports remained untouched in this cycle, while aviation fuel shipments saw an increased tax burden. The reduction in export tax on diesel is expected to offer refiners modest relief in processing margins during external sales.
Petrol Rates Below Rs 105 in Key Northern Metros
Consumers across several northern cities continue to access petrol below the Rs 105 per litre threshold. In the national capital, New Delhi, as well as in neighboring Noida, petrol is priced at an identical Rs 102.12 per litre on October 1. Across Uttar Pradesh, motorists in Lucknow pay Rs 102.68 per litre, while fuel pumps in Gurgaon have priced petrol at Rs 102.97 per litre. Among union territories and coastal hubs, Chandigarh offers one of the lowest rates in the country at Rs 101.54 per litre. In Chennai, the fuel is retailing at Rs 107.76 per litre, whereas Bhubaneswar has recorded Rs 109.03 per litre.
Fuel Breaches Rs 110 Mark: Hyderabad Highest Nationwide
In contrast to the northern plains, several western, southern, and eastern urban centers have seen petrol prices surge past Rs 110 per litre. Kolkata registered a retail rate of Rs 113.51 per litre on October 1, while Mumbai saw petrol trade at Rs 111.21 per litre. In Bangalore, the rate stands at Rs 111.68 per litre. Further inland, Jaipur recorded a retail rate of Rs 113.19 per litre, and Patna clocked Rs 113.37 per litre. Hyderabad emerged as the costliest major city in India for petrol consumption, where the rate touched Rs 116.15 per litre, followed closely by Thiruvananthapuram at Rs 115.49 per litre.
Diesel Variations: Chandigarh Remains Cheapest at Rs 89.47
Diesel prices similarly reflect deep regional divides across state borders. In New Delhi, diesel retails at Rs 95.20 per litre, while nearby Noida lists it at Rs 95.56 per litre. Mumbai motorists pay Rs 97.83 per litre at the pump. Across other cities, diesel sells at Rs 98.25 in Jaipur, Rs 99.36 in Patna, Rs 99.55 in Chennai, Rs 99.56 in Bangalore, and Rs 99.82 in Kolkata. The most cost-effective location for diesel buyers is Chandigarh, where the rate stands at Rs 89.47 per litre. On the upper end of the spectrum, Bhubaneswar has crossed the psychological century mark at Rs 100.74 per litre, while Thiruvananthapuram and Hyderabad command the highest diesel prices in the country at Rs 104.40 and Rs 104.23 per litre, respectively.
Middle East Shipping Flows and Geopolitical Standoff
Regional crude dispatches have been edging closer to pre-conflict volumes after Saudi Arabia restored half of the operational capacity along its East-West pipeline corridor. Furthermore, outbound crude transits traversing the Strait of Hormuz advanced to 13.2 million barrels per day. Despite these logistical improvements, commodities markets remain on edge regarding the longevity of the supply recovery without a formal settlement to end the Iran war, as both Washington and Tehran assert complete control over the choke point. Meanwhile, Iranian government spokesperson Fatemeh Mohajerani disclosed that Tehran has received an American proposal concerning the reopening of the strait. On the production front, OPEC+ is widely anticipated to keep its November output allocations unchanged during its upcoming weekend gathering, according to Trading Economics.
Physical Oil Tightness and Spot Market Premiums
According to research commentary from analysts at Choice Institutional Equities, the physical oil market continues to experience severe structural deficits that are masked by headline flow improvements through the Strait of Hormuz. Analysts noted that Brent spot prices are currently commanding a steep premium of $20 per barrel over future contracts, indicating persistent immediate-term physical scarcity. Based on this prevailing spot-futures price spread, Choice Institutional Equities calculates that the physical crude market is confronting an underlying deficit of approximately 8 million barrels per day. The analysts observed that any further slowdown in Chinese crude imports represents the primary mechanism that could narrow this shortfall, while prospective emergency reserve drawdowns by the International Energy Agency could exert downward pricing pressure. Earlier in the week, Brent crude surpassed $108 per barrel, marking a sharp month-on-month surge of nearly 17 percent.
