Petrol and diesel prices were hiked on Tuesday. Petrol price in Delhi was hiked to Rs 74.80 per litre from Rs 74.63 while diesel rates were increased to Rs 66.14 a litre from Rs 65.93, according to a price notification issued by state-owned oil marketing companies.
Petrol prices are up by 17 paise a litre in Delhi and Mumbai, and 18 paise a litre in Kolkata and Chennai, according to the Indian Oil Corporation. Diesel prices have been raised by 21 paise a litre in Delhi, 5 paise in Kolkata, and 23 paise in Mumbai and Chennai, according to Indian Oil’s website – iocl.com.
Indian Oil chairman Sanjiv Singh had last week said that the state-owned firms were “temporarily moderating” prices to avoid sharp spikes and panic among consumers, according to news agency Press Trust of India.
Global crude oil prices have risen over the past few months, to trade near 2014 highs. Domestic petrol and diesel prices are determined broadly by global crude oil and rupee-dollar forex rates.
In April 2018, petrol and diesel prices in India have hit a record high in India. In New Delhi, petrol price has touched Rs 73.83 per litre; the highest in the last four years.
There are various reasons behind the fuel prices raised.
Globally, the price of crude oil contributes to a good proportion of the final fuel price. Crude oil price is currently $70 per barrel (roughly Rs 4553). However, in India, a good share of the petrol and diesel price go to the government as taxes: Excise duty to the Centre and Value Added Tax (VAT) to the states.
The BJP-led government raised the excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October 2017 by Rs 2 a litre.
Speaking about the hike, Minister for Petroleum and Natural gas, Dharmendra Pradhan told the media, not to criticise the government for the rise in fuel prices, but to focus on the good works done. He also added that other governments have done worse. In addition to this, he claimed that international markets were to be blamed for increased fuel prices in India. The government, according to him, has reduced the excise duty on fuel to keep the prices in check.