No respite from petrol, diesel price hike rally; scaling new heights every day
Petrol and diesel rates on Friday have scaled new heights after the fourth consecutive price hike. Petrol price on Friday has shot up by 30 paise, while diesel price has been hiked by 35 paise. The fresh series of price hikes for motor fuels come on the back of the increasing price of crude oil in the international market.
With the latest price surge, Delhi and Mumbai are selling a litre of petrol at 103.54 and ₹109.54 in Delhi and Mumbai respectively. Diesel prices in these two cities are ₹92.12 and ₹99.92 respectively.
With OPEC+ decided not to increase the production of crude oil, the price of per barrel crude in the international market has increased by $82. Even a month back, the price of per barrel crude oil in the international market was $72. This large proportional fuel rate hike has impacted domestic motor fuel prices.
Around 85 per cent of India's total fuel demand is imported from overseas countries. Hence, any change in the international crude oil market impacts domestic fuel costs. Moreover, the high rate of excise duty further makes things worse. Besides that, other components that increase the price of petrol and diesel include variable VAT amounts imposed by the state governments, dealer commission, freight charges etc.
In the last two years, excise duty on fuel has increased substantially. This has resulted in incessantly hike in motor fuel prices. Petrol and diesel prices earlier this year have seen a massive spike. This resulted in petrol crossing ₹100 per litre mark in several places for the first time ever. Diesel too witnessed a similar price hike.
There has been a demand for bringing fuel price under GST ambit. However, several state governments opposed that fearing loss in revenue. The central government on the other hand is not ready to reduce its excise duty on fuel.