Petrol, diesel prices finally slashed after over a year

In the first price reduction in over a year, the petrol price on Wednesday was slashed by 18 paise per litre while diesel price too was brought down by 17 paise a litre. The move comes from the oil marketing companies as the international crude oil prices have tumbled to the lowest since early February in the light of the resurging Coronavirus cases across the world and growing restrictions on mobility. The last price reduction for both petrol and diesel was announced on March 16, 2020.

This is also the first price revision after February 27, as the prices of both the motor fuels were steady since then after the assembly elections of four states (Assam, Kerala, Tamil Nadu and West Bengal) and one union territory was announced.

In India, petrol and diesel prices were increased unprecedentedly to new highs since early February 2021, just after the Union Budget 2021. After so many hue and cries, now the petrol price in Delhi stands at ₹90.99 a litre from ₹91.17 per litre a day ago. On the other hand, diesel price in the national capital has come down to ₹81.30 a litre, from the previous rate of ₹81.47 per litre. In Mumbai, the petrol price on Wednesday was cut to ₹97.40 a litre from ₹97.57, while diesel rates were reduced to ₹88.42 per litre from ₹88.60.

In the last one year, the price of petrol has increased by a record ₹21.58 per litre, while the diesel prices had increased by ₹19.18 a litre. The surge in excise duty by the central government and international crude oil price hike due to production cuts by the oil-producing OPEC countries have played major roles behind this price hike of the motor fuels in India.

Currently, the petrol and diesel prices in India comprises components like central government-imposed excise duty, variable VAT rates by the state governments, dealer commission etc. The central and state government taxes account for around 60% of the pump prices for both motor fuels.

Last month, at a point price of petrol, crossed ₹100 mark for the first time in select cities of Rajasthan, Maharashtra and Madhya Pradesh. Post that, a few state governments like Assam, West Bengal and Meghalaya announced a marginal cut in their share of taxes, the central government denied reducing the excise duty. There have been discussions to bring petrol and diesel under the GST ambit in order to bring uniformity in the fuel prices. However, any decision regarding that is pending.