Today, petrol prices across India are hovering around ₹100 per litre, and in some places, even more. Diesel prices are also touching the sky. But have you ever wondered what a litre of petrol or diesel cost in India back in the 1950s?
Right now, petrol and diesel prices in most Indian states are around the ₹100 mark. But you'll be shocked to know that around 1950, petrol in India cost just 30 to 40 paise per litre. Yes, you read that right! Motorists paid only 40 paise for a full litre of petrol.
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Diesel Price in the 1950s
During that time, diesel was sold for an even lower price, between 20 and 30 paise per litre. Some reports even claim that around 1947, petrol cost just 27 paise a litre. The government used to fix these prices under a 'Price Control System', which kept fuel very affordable.
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Why was petrol so cheap then?
In the 1950s, the government decided the price of petrol and diesel through a system later known as the Administered Pricing Mechanism (APM). This system protected the common man from the direct impact of international crude oil prices. Also, taxes were much lower than they are today, which helped keep fuel prices down.
According to government records, petrol in Delhi cost ₹8.50 per litre in 1989, while diesel was ₹3.50. Prices changed rapidly after 1990, 2000, and 2010. The government started using a market-based system to decide petrol prices in June 2010 and for diesel in October 2014.
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How are prices decided today?
Today, public sector Oil Marketing Companies (OMCs) set the prices daily. They consider international prices of crude oil and petroleum products, the dollar-rupee exchange rate, freight charges, refining costs, and central and state government taxes. This is why fuel prices now go up and down based on market conditions.
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The price of one litre of oil
The price of one litre of petrol or diesel is much more than just the cost of crude oil. It includes refining costs, transport charges, dealer commissions, the central government's excise duty, and the state government's VAT. This is why even when international crude oil becomes cheaper, retail prices don't always fall by the same amount.
