Fuel prices hit the roof in India

This is the seventh straight day of price increase since oil PSUs on May 14 resumed daily price revision after a 19-day pre-Karnataka poll hiatus.

By Author  |  Published: 21st May 2018  12:55 amUpdated: 21st May 2018  12:57 am
Fuel Pumps
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New Delhi: Petrol price on Sunday touched a record high of Rs 76.24 per litre and diesel climbed to its highest ever level of Rs 67.57 as the oil PSUs passed on four weeks of relentless rise in international oil prices to consumers.

Petrol price increased by 33 paisa a litre in Delhi — the highest since the daily price revision came into force in mid-June 2017, and diesel by 26 paisa, according to price notification issued by State-owned oil firms. Rates vary from State to State depending on the incidence of local sales tax or VAT. Prices in Delhi are the cheapest in all metros and most State capitals. With this increase, petrol touched an all time-high, breaching the previous high of Rs 76.06 touched in Delhi on September 14, 2013. Diesel rates are also at the all-time high level.

This is the seventh straight day of price increase since oil PSUs on May 14 resumed daily price revision after a 19-day pre-Karnataka poll hiatus. In all, petrol price has been raised by Rs 1.61 a litre and diesel by 1.64 in the last one week.

In India, petrol is the costliest in Mumbai where high local taxes led a price of Rs 84.07 per litre. Petrol breached Rs 80-mark in Bhopal (Rs 81.83 a litre), Patna (Rs 81.73), Hyderabad (Rs 80.76) and Srinagar (Rs 80.35), according to the price notification. Petrol in Kolkata costs Rs 78.91 per litre, while it is priced at Rs 79.13 in Chennai. The cheapest petrol is available in Panjim where a litre comes for Rs 70.26.

Diesel is the costliest in Hyderabad were it is priced at Rs 73.45 a litre due to high local taxes. It is priced at Rs 73.34 in Trivandrum. Other cities where diesel rates crossed Rs 70-mark are Raipur (Rs 72.96), Gandhinagar (Rs 72.63), Bhubhaneswar (Rs 72.43), Patna (Rs 72.24), Jaipur (Rs 71.97), Ranchi (Rs 71.35), Bhopal (Rs 71.12) and Srinagar (Rs 70.96). A litre of diesel costs Rs 71.94 in Mumbai, Rs 70.12 in Kolkatta and Rs 71.32 in Chennai, the notification said. Diesel is the cheapest in Port Blair where it is priced at Rs 63.35.

On Friday, Economic Affairs Secretary Subhash Chandra Garg refused to say if the government will cut excise duty on auto fuel to ease the burden on consumers. The government is watching the situation developing from oil prices hitting $80 a barrel — the highest since November 2014, and adequate steps will be taken, is all he said without elaborating.

Asked if the government would cut excise duty on petrol and diesel, he said he has nothing to say on that front. “Just watch.”

The BJP-led government raised excise duty nine times — totalling Rs 11.77 per litre on petrol and Rs 13.47 on diesel — between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre. No sooner had Karnataka polled to elect a new State government, State-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) on Monday ended a hiatus in revising petrol and diesel prices that began on April 25 and reverted to the 11-month old practices of changing rates on a daily basis.

Oil PSUs are estimated to have lost about Rs 500 crore on absorbing higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar during the nearly three week hiatus.

The benchmark international rate for petrol, used for revising rate on April 24, went up from $78.84 per barrel to $84.97 on May 14, indicating more daily hikes would be needed to level retail price with cost. Similarly, benchmark international diesel rates during this period climbed from $84.68 per barrel to $90.28 per barrel. Also, the rupee weakened to Rs 67.27 per US dollar from Rs 66.62, making imports costlier.