Petrol, diesel price hike: India in talks with Saudi Arabia and Russia

The Centre is holding talks with oil producing nations in the Gulf and elsewhere to find a solution to the rising fuel prices. According to Union Minister for Petroleum Hardeep Singh Puri, India is in touch with countries like Saudi Arabia and Russia from where it imports most of the fuel.

"We are working on various levels... I am talking to my counterparts in Saudi Arabia, Gulf countries and Russia," said Hardeep Singh Puri, as the nation continues to grapple with rising prices of petrol and diesel.

Oil prices edged lower on Tuesday but remained near multi-year highs. Brent crude has been trading at nearly $ 85 per barrel. Forecasts from Goldman Sachs or BlackRock suggests it could go up to anything between $90 and $100 per barrel.

Till Sunday, the country once again witnessed a series of hikes in petrol and diesel rates. In five consecutive days, price of both fuel rose by around ₹2 per litre. Within the last four weeks, petrol price has been hiked by as many as 21 times, while diesel price was hiked 24 times since September 24. The latest hikes have increased petrol price by ₹6.40 per litre and diesel by ₹7.70 per litre.

Since May last year, petrol and diesel prices have seen unprecedented surge. In just 18 months, the price of petrol has gone up by ₹36 per litre. Diesel too is not too far behind with an overall hike of ₹26.58 per litre during this period.

Fuel prices in India have hit an all-time high, and is touching new records with every hike each passing day. Earlier this year, petrol price breached the Rs-100 per litre mark, and is the new normal across the country. Now diesel too threatens to go past the Rs-100 mark in most cities across the country.

While one of the key reasons behind hike in fuel prices is the rate of global crude oil, high tax structure on petrol and diesel remains a big concern. The central and state government taxes contribute nearly 60% of the petrol retail price and 54% of the diesel retail rate. Currently, the Centre levies excise duties of ₹32.80 per litre on petrol and ₹31.80 on diesel. Both fuel also attract variable VAT amounts from different state governments and dealer commissions as well.

Hardeep Singh Puri has already ruled out any chance of reducing taxes on petrol and diesel. Terming such a move as 'axing one's own feet', Puri justified the high taxes by saying, "That ₹32 a litre that we collect provides us the ability to provide all these welfare services, including 1 billion vaccines."

Recent efforts to bring petrol and diesel under the GST regime in order to rationalise duties have also failed.