Petrol and diesel prices were hiked on Tuesday amid firming global crude prices, the sixth day of hike in a row. Oil marketing companies revise petrol and diesel prices every day at 6 am according to the daily price revision process. Petrol prices remained above 4-year high level in Delhi while diesel prices touched a new high. The price of non-branded petrol was increased by 11-13 paise per litre in metro cities on Tuesday while diesel by 13-14 paise, according to Indian Oil, the biggest oil retailer in the country. Petrol retailed at Rs. 73.95 in Delhi, the highest since September, 2013, when rates had hit Rs. 76, according to Indian Oil website. In other metro cities, petrol retailed at Rs. 76.66 in Kolkata, Rs. 81.8 in Mumbai and Rs.76.72 in Chennai.
On the other hand, diesel retailed at a record high of Rs. 64.82 a litre in Delhi. In Kolkata, diesel retailed at Rs. 67.51 in Kolkata, Rs. 69.02 in Mumbai and Rs. 68.38 in Chennai.
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Besides global crude prices and rupee-dollar exchange rate, domestic petrol and diesel prices depend on government taxes, both at the central and the state level. India imports bulk of its energy requirements. Global crude prices have risen close to $70 a barrel.
Oil Minister Dharmendra Pradhan on Monday said the government is keeping a close eye on international prices but said there is no going back on free market pricing. He said consumers will benefit if petrol and diesel are brought under Goods and Services Tax (GST) regime at the earliest.
Meanwhile, the government on Monday ruled out any immediate reduction in excise duty to cushion relentless rise in international oil prices that have sent retail diesel rates in India to record high and petrol to four-year high.
The government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs. 2 a litre. Asked if a second round of excise duty cut was in offing, Finance Secretary Hasmukh Adhia said: “Not as of now. Whenever we review it, we will let you know”.
The October 2017 excise duty cut cost the government Rs. 26,000 crore in annual revenue and about Rs. 13,000 crore during the remaining part of the current fiscal year.
Global crude prices inched up on Tuesday as rising Russian output and expectations of a reduction in Saudi Arabian crude prices were offset by a potential slowdown in US production. Brent crude futures rose to $67.84 per barrel.
Brent reached a 2018 high of $71.28 in January but has since struggled to pass that level. Two rallies last week ran out of steam just above $71. Since the start of this year, domestic petrol prices in top metro cities have risen by around Rs. 4 per litre while diesel have gone up by over Rs. 5.
State-owned oil companies – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – in June last year dumped the 15-year old practice of revising rates on the 1st and 16th of every month . Instead, they adopted a daily price revision system to instantly reflect changes in cost. Since then, prices are revised on a daily basis.