Hyderabad: Petrol prices in the country touched their highest levels since Prime Minister Narendra Modi assumed office three years ago even as the Indian basket of imported crude oils gained nearly $3.50 a barrel during last week.
Under the daily revision of fuel prices, petrol in Mumbai on Monday cost Rs 79.41 a litre, breaching the level it last touched in August 2014.
Post revision, petrol per litre cost Rs 74.41 in Hyderabad, Rs 76.65 in Vijayawada, Rs 70.30 in Delhi, Rs 73.05 in Kolkata and Rs 72.87 in Chennai. Similarly, diesel price was Rs 63.68 per litre in Hyderabad, Rs 65.01 in Vijayawada, Rs 58.62 in Delhi, Rs 61.27 in Kolkata, Rs 62.26 in Mumbai and Rs 61.73 in Chennai.
Following the rise in global crude oil prices, petrol price was hiked by 13 paise a litre and diesel by 25 paise per litre, applicable from 6 a.m. on Monday. Petroleum products do not come under the Goods and Services Tax (GST) and prices vary at locations according to state taxes.
The huge increase in petrol and diesel prices in India despite low crude prices is on account of hike in taxes by both the central and state governments over the last three years. The central excise duty on petrol increased from Rs 9.48 to Rs 21.48 per litre in the three-plus years of the BJP government, according to a Factly.in report. On the other hand, the duty on diesel increased by more than four times from Rs 3.56 per litre to Rs 17.33 per litre.
As if not to lag behind, the state governments also enhanced taxes on petrol and diesel. The State VAT on petrol is at least 25 per centre in 26 states with the highest in Mumbai at 48.98 per cent. The State VAT on diesel is more than 20 per cent in 15 states with highest of Rs 30.06 per cent in Andhra Pradesh.Â Â
The Indian oil basket, comprising 73 per cent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, closed trade on Friday last week at $53.63 per barrel, according to the Petroleum Ministry. The oil basket had gained over a dollar at the start of last week on Monday to close at $51.34 for a barrel of 159 litres.
Earlier this month, Petroleum Minister Dharmendra Pradhan said the dynamic pricing regime would continue despite petrol prices going up by over Rs 7 per litre since the scheme was introduced pan-India from mid-June.
He said dynamic pricing ensures that the benefit of even the smallest change in international oil prices can be passed down the line to the dealers and the end-users. “Daily revision in prices is good. When we started daily revisions on June 16, rates dropped in the first fortnight. Thereafter, it has increased mainly because of rise in global oil prices,” he said.
Daily revision allows any fall in international oil rates to be passed on to consumers immediately rather than having to wait for 15 days as in the old system, he added. “Should prices be hiked by Rs 2.50 or Rs 3 per litre in one go or they should be spaced out in small doses,” he asked.
Earlier, the state-run oil marketing companies used to review and revise retail fuel prices every fortnight on the basis of global crude oil prices, while the revision took effect from midnight. Dynamic fuel pricing is followed in many developed countries and India opted for it as a response to the recent volatility in global crude oil prices.
(With inputs from Factly.in, IANS)