Fuel prices rise over Rs 4/litre in 8 days

Marco Green
June 16, 2020

Since the dynamic price revision resumed on June 7, prices of petrol and diesel have increased by Rs 4.52 and Rs 4.64 per litre respectively.

In the last 10 days, petrol price has been hiked by Rs 5.47 per litre and diesel by Rs 5.80 per litre, adding to the woes of consumers battling the fallout of coronavirus.

Petrol price in Delhi was hiked to Rs 75.16 per litre from Rs 74.57, while diesel rates were increased to Rs 73.39 a litre from Rs 72.81, according to a price notification of state oil-marketing companies.

On Monday, petrol price was hiked by 48 paise per litre, diesel price was increased by 59 paise as oil companies continue to adjust retail rates after ending an 82-day hiatus in revision. "The computation of the pump prices has taken into account the changes effected by the tax laws amendment act 2020 that made taxes and duties part of the vatable amount in the calculation of VAT for petroleum fuels", said Pavel Oimeke, Director General Energy and Petroleum Regulatory Authority.

"The government earned as much as ₹44,000 crore in the last six days due to hike in petrol, diesel prices". Initially, the oil companies such as Hindustan Petroleum Corp Ltd (HPCL), Bharat Petroleum Corp Ltd (BPCL) and Indian Oil Corp (IOC) had absorbed the hike, however, from June 7 onward the fuel prices were hiked on a daily basis. This follows an increase in the cost of crude following demand growth attributed to economies reopening and an agreement among major oil producers to reduce production. And this was done in contrast to the global crude oil prices that have reported to be at their multiyear lows.

Petrol and diesel prices continued to rise through the week with the two petroleum products getting dearer by 59 and 58 paise per litre on Saturday. If this has to be covered over a period of time, given there is no further increase in global prices, auto fuel prices may be increased by 40-60 paise per day for a few more days to cover the losses.

Raising retail prices has become important for OMCs now as the recent steep excise duty hike without a resultant increase in petrol and diesel prices had substantially brought down its marketing margins from record-high levels of Rs 12-18 per litre.

The daily rate revision of fuel prices was suspended by the OMCs since mid of March after the central government hiked excise duty on petrol and diesel to mop up extra revenues from taxes.

Other reports by Click Lancashire

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