Petrol, diesel prices at 3-year high

Marco Green
September 13, 2017

Petrol and diesel prices are on a sustained rise of late, but this time it's not much to the notice of the people at large, as FE Online has repeatedly pointed out in the recent past. Amid the continuing rally, the retail fuel prices have touched a key milestone, that of hitting three-year highs in several cities across the country.

The government is facing flack from the opposition and consumers alike after petrol price steadily rose to Rs 70.38 a litre in Delhi on September 12 from Rs 65.48 a litre on June 16.

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.

On June 6, the government launched the daily price change mechanism, which has been receiving a lot of flak amidst escalating prices.

"GST is the only way to have a rational price mechanism for petroleum products.the industry has been demanding it and finance minister Arun Jaitley (who heads the GST Council) is very interested to have it", Pradhan said, pointing to the substantial difference in prices between Delhi and Mumbai, for instance, on account of local taxes.

Minister Dharmendra Pradhan on Wednesday ruled out cutting taxes on petrol and diesel to cushion the impact of rising worldwide oil prices that has led to petrol rates increasing by over Rs 6 per litre since the beginning of July.

He said dynamic pricing ensures that the benefit of even the smallest change in global oil prices can be passed down the line to the dealers and the end-users.

With crude oil prices plunging a year ago, the government levied cess on petrol in order to mop up extra revenue for the exchequer. Since prices are being revised daily, even steep rise goes unnoticed. "Thereafter, it has increased mainly because of rise in global oil prices", he said.

If we bring these products under the Goods and Services Tax regime, there will be some predictability in the tax component in fuel, he added.

As FE Online wrote earlier, crude oil price is not the only factor affecting the retail fuel prices. Since July 1, petrol price in Delhi has risen by Rs 7.29 per litre to Rs 70.38 per litre today (Wednesday, 13 September, 2017), though this seems to be in line with the over 12% rise in the prices of the Indian basket of crude oil in rupee terms during the same period.

Other reports by Click Lancashire

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