Petrol, Diesel prices increased first time in 19 days – Day after KA election

For the first time since the inception of daily revision of fuel price policy was introduced, that it is seen that fuel prices were not changed for 19 days consecutively.

Late last month, fuel prices hit an all time high. Petrol price hit a 55 month at INR 81.96 per litre in Mumbai, India’s financial capital. Diesel prices touched an all time high at INR 69.54. These are the highest recorded fuel prices in the state of Maharashtra. In Delhi too, diesel price crossed Rs 64 per liter, which is the highest ever recorded price of diesel in Delhi. These increase in fuel prices has given rise to renewed calls to the Government of India to cut excise tax rates.

Suddenly, the price of fuel stopped increasing. It did not decrease either. Basically, it stopped fluctuating in India, even when the international prices were fluctuating. But suddenly, they have increased again today, coincidentally a day after Karnataka elections. TheWire.in reports that this has sparked allegations of government intervention into controlling fuel prices in India

Image – mypetrolprice.com

Today, price of petrol in Mumbai is Rs 82.68 a liter, in Delhi its Rs 74.84 a liter. Since June 2017, state owned oil firms Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation have been revising petrol and diesel prices on a daily basis. Over the last three months, price of petrol and diesel have increased by about Rs 5 a liter.

The rise in petrol and diesel prices is due to rise in the rate of crude oil. India imports more than 80% of its crude oil requirement from international market. This makes our petrol and diesel price directly proportional to international crude oil prices.

Image – Deepak Gupta/ HT Photo

The Oil Ministry had earlier sought a reduction in excise duty on both petrol and diesel to cushion the impact of rising international oil prices. This was however turned down by Finance Minister Arun Jaitley in budget presented on 1st February.

Among all South Asian nations, India ranks the highest where retail prices of petrol and diesel are concerned with taxes accounting for half of fuel pump rates. More than 48% of petrol’s value and 38% of diesel value is charged by the govt as tax in India.

Excise duties have been raised 9 times during the period November 2014 to January 2016. The Government had only cut excise duty by INR 2 in October 2017 when petrol was at INR 70.88 per liter and diesel was at INR 59.14 per liter. It was in June 2017 that state owned oil companies decided to do away with 15 year old practice of revising fuel rates on 1st and 16th of each month and instead adopt a daily price revision system.

Also – ANI reported – The rise in petrol prices is not restricted to one state. The issue has been sent to GST Council which will take the decision eventually. I appeal to the council to bring this matter under it: Petroleum Minister Dharmendra Pradhan on hike in petrol prices in Madhya Pradesh