Fuel prices shot up on Thursday with petrol retailing at its costliest in Mumbai at Rs 87.82 per litre, recording an increase of 9 paise. Diesel is being sold at Rs 78.22, up by 29 paise.
In Delhi, petrol is being sold at Rs 82.36 per litre, registering an increase of 10 paise and diesel Rs 74.62, up by 27 paise, according to Indian Oil's daily pricing formula.
In Kolkata, petrol is retailing at Rs 84.19 a litre and diesel at Rs 76.47; in Chennai petrol is priced Rs 85.61 and diesel at Rs 78.90; in Hyderabad petrol costs Rs 87.31 and diesel at Rs 81.17.
Since mid-August, the petrol price has risen by Rs 6.86 a litre and diesel by Rs 6.73 " the most in any six-week duration after the daily price revision was introduced in mid-June last year.
Retail selling prices of petrol and diesel have reached a record high in India because of the increase in global crude oil prices and a depreciation in the Indian rupee.
The government had provided a relief to the common man when it reduced petrol and diesel retail selling prices by Rs 2.50 per litre on 4 October. Through the lowering of excise duties by Rs 1.50 per litre and asking the country's oil marketing companies (OMCs) to absorb the remaining Rs 1 per liter ($2.1 per barrel) price cut, it was expected that fuel prices would be contained. However, prices shot up the very next day.
Within a day of the one-off excise duty cut and PSUs subsidising fuel, petrol and diesel prices were on the rise again and hit a three week high. Petrol price was hiked by 18 paise a litre on 6 October and 14 paise on Sunday, according to daily price notification issued by state-owned oil firms.
Almost half of the fuel price is made up of taxes. The centre levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy value-added tax (VAT) " the lowest being in Andaman and Nicobar Islands where a 6 percent sales tax is charged on both the fuels.
Before the reduction, Mumbai had the highest VAT of 39.12 percent on petrol, while Telangana levies the highest VAT of 26 percent on diesel. Delhi charges a VAT of 27 percent on petrol and 17.24 percent on diesel.
The BJP-government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by Rs 13.47 a litre in nine instalments 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.
|Petrol prices in Rs per litre||Diesel prices in Rs per litre|
|*prices as on 10 October 2018; #prices as on 11 October, 2018|
Oil Minister Dharmendra Pradhan on Monday ruled out going back on deregulation of fuel pricing despite the government asking state-owned firms to subsidise petrol and diesel by Re 1 a litre.
Speaking at The Energy Forum in Delhi, he said international oil prices touching a four-year high of $85 a barrel is a "challenge" that has resulted in fuel prices continuing to rise despite a one-off excise duty cut and public sector units (PSUs) subsidising fuel.
Pradhan said he had spoken to Saudi Oil Minister Khalid A Al-Falih and "reminded him of the June commitment of OPEC to increase production by 1 million barrels per day" to help cool prices.
"Maybe OPEC is not following the June decision," he said.
The combination of high international oil prices and a depreciating rupee has made imports costlier, resulting in retail pump rates shooting up
Pradhan said the decision to cut excise duty on petrol and diesel by Rs 1.50 a litre each and ask oil PSUs to absorb another Re 1-a-litre was aimed at "giving relief to consumers".
On asking oil PSUs to subsidise fuel, he said the companies have taken the decision to "shield" consumers from high prices.
"This is not going back on deregulation. Fuel prices continue to be decided on a daily basis based on factors like benchmark international rate and foreign exchange rate," he said.
Indian Oil Corp (IOC) Chairman Sanjiv Singh said the oil companies continue to have the freedom to change rates on a daily basis and the Re 1 a litre subsidy was a temporary move.
Pradhan said the centre had done its bit and now states should come forward and cut sales tax or VAT.
--- With inputs from agencies