Fuel price hike: Diesel price increased after a gap of 19 days, petrol steady

Diesel price has gone up once again after a hiatus of around three weeks. On Friday, oil companies have increased the price of diesel by 20 paise for a litre amid rising demands.

A litre of diesel will now cost ₹88.82 in Delhi, up from the low of ₹88.62 per litre on September 5. The price of diesel had hit record high in Delhi back in July when it used to cost ₹89.87 per litre.

The price of petrol remains unchanged in the latest revision of fuel prices. Petrol price, which is steady at ₹101.19 per litre, has remained constant since the last fuel price hike happened on September 5.

After global crude oil prices dropped sharply to under $70 for each barrel last month, the price of petrol and diesel saw downward revision after a spate of hikes since January this year. India imports over 80% crude oil which directly impacts the pricing of petrol and diesel in the country.

Since May last year, petrol and diesel prices have gone up by more than ₹30 per litre. After reaching record highs across all over the country, petrol price was reduced by 65 paise for a litre and diesel by ₹1.25 per litre.

The cost of these fuel are much higher than it should have cost straight out of a refinery because of several Central and state taxes levied on them. For instance, In Delhi, Centre's tax contributes to 32.5% of petrol's retail price besides the state government's taxes in form of Value Added Tax (VAT) constitutes another 23.07% of the overall price. On diesel, the central excise is over 35.8% while VAT is more than 14.6%. Currently, the Centre levies excise duties of ₹32.80 per litre on petrol and ₹31.80 on diesel.

There were slim hopes that the Centre and states will agree to include petrol and diesel under the GST regime, which would have substantially reduced the price of the fuel. But a GST Council meeting that was held last week, has deferred the matter indefinitely after state governments objected to discussing the matter.