New Delhi, Sep 9, 2018: Petrol price touched a new high in Delhi on Sunday, selling at Rs 80.50 per litre, while diesel retailed at Rs 72.61. In Mumbai, petrol cost Rs 87.89 per litre, while diesel was selling at Rs 77.09.
Despite the soaring fuel prices, the government has maintained that international rates are to blame and has given no indication of cutting taxes. Oil Minister Dharmendra Pradhan also cautioned against a “knee-jerk reaction”. "As a stable economy, as the fastest growing major economy, let’s not give any knee-jerk reaction, let’s wait," he said on Friday.
The Centre currently levies a total excise duty of Rs 19.48 per litre of petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax —the lowest being in Andaman and Nicobar Islands where 6 per cent sales tax is charged on both the fuels.
Since mid-August, petrol price has risen by Rs 3.24 a litre and diesel by Rs 3.74 per litre as rupee hit record low against the US dollar, making imports costlier. This is the biggest increase in rates in any fortnight since the daily price revision was introduced in mid-June last year.
Opposition parties have called for a ’Bharat Bandh’ on Monday (September 10) to protest against the spiraling fuel prices.
BJP’s bickering ally in Maharashtra, the Shiv Sena, too, took potshots at the central government, putting up posters to mock the saffron party’s 2014 campaign slogan of ‘achhe din’.
According to sector experts, a weak rupee along with high excise duty have been major factors for the rise in fuel prices. On the currency front, the Indian rupee settled above 70 to a US dollar in the spot market for the week ended Friday. It closed at 71.73, stronger by 26 paise than its previous close of 71.99 per greenback.
Apart from the weak local currency, the high global crude oil cost has become a major concern for the country which is a net importer of oil.
Currently, Brent crude oil prices stand at around $77 per barrel.
Since the start of the year, the petrol price in Delhi has risen by Rs 10.41 from Rs 69.97 a litre and the diesel price has gone up by Rs 12.81 from Rs 59.70 a litre on January 1.
Implication wise, the rise in diesel prices is expected to flare up inflationary pressure as the fuel is primarily used to transport the majority of goods, including agriculture products.
As per the country’s pricing mechanism, the domestic fuel prices are dependent upon the international fuel prices on a 15-day average and the impact of the rupee-US dollar fluctuations.