The fuel prices are at all-time high in the country. On Thursday, oil marketing companies have again raised petrol price by 16 paise a litre and diesel by 14 paise a litre. With the latest increment, petrol is retailing at ₹79.92, while diesel is being sold at ₹80.02 a litre, in the national capital. Diesel prices in Delhi overtook petrol prices on Wednesday.
This is the 19th consecutive increment for the diesel price since the revision restarted on June 7 after an 82-day-long hiatus, while petrol price remain unchanged on Wednesday, after a gap of 17 days.
Since Oil Marketing Companies (OMCs) restarted revising fuel prices on June 7, petrol and diesel prices have risen by ₹8.5 and ₹10.49 a litre, respectively.
(Also read: Revenue loss during lockdown means fuel prices under GST unlikely in near future)
Rates vary from state to state, however, diesel is costlier than petrol only in Delhi due to the sharp increment of local taxes or VAT.
As per Chairman of state-run Indian Oil Corp (IOC), Sanjiv Singh, the higher diesel price in the national capital city was due to a steep hike in Value Added Tax or VAT by the state government.
He mentioned that VAT remains lower in other cities, hence diesel is more affordable than petrol. “The Delhi government had increased VAT on petrol from 27% to 30% and that on diesel from 16.75% to 30% on May 5," said Singh.
State-owned fuel firms benchmark retail rates to Arab-Gulf international oil prices and a formula plays a decisive role, the IOC chairman said. He added that fuel demand fell steeply in the wake of lockdowns imposed across the world in order to restrict the coronavirus outbreak, forcing the oil prices to fall to a multi-year low.
(Also read: Have diesel cars become 'white elephants' in current times of fuel price hikes?)
Singh added that the companies again returned to changing rates as soon as the international markets stabilised and this also included passing on the excise duty.
The government is now facing the Opposition’s backlash over the fuel price hike.