Petrol price Petrol prices rises for 5th consecutive day

At Rs 74.40, petrol price hits highest level, diesel at record Rs 65.65

At Rs 74.40, petrol price hits highest level, diesel at record Rs 65.65

"Excise duties have risen significantly since 2013-14, accounting for 22-25% of the retail prices of petrol and diesel respectively, compared with 12-15% earlier when crude prices were at similar levels", Crisil had said.

The fiscal deficit target for 2018-19 is 3.3 percent of the GDP, and the government doesn't want to overshoot its borrowing target for the time being. There has been massive increase in diesel prices, which is why, metro cities and other state capitals have touched record highs, especially Mumbai, where it stood over Rs 70 per litre mark. The Petroleum ministry is also believed to be evaluating global price trend and the impact of daily pricing of fuel with OMCs.

"Excise duty cut would be a political call, but is not advisable if we have to stick to the fiscal deficit glide path outlined in Budget", a PTI report quoted a ministry official as saying. In terms of diesel prices, it is retailing in Delhi at Rs 65.75; in Kolkata at Rs 68.45; in Mumbai at Rs 70.1 and Rs 69.37 in Chennai. The official said states should cut Value-Added Tax on fuel to ease the burden on the consumer.

The excise duty cut in October cost the government Rs 26,000 crore annually, said the official. So, one thing the government can do, and which it is reportedly considering doing, is to ask the OMCs to refrain from passing on the higher oil prices to consumers.




Now, the prices of diesel and petrol are revised by state-owned oil market companies like Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation on a daily basis based on global market rates of crude oil and foreign exchange rates. The government is also not in favour of tinkering with the autonomy given to oil PSUs to revise rates daily in line with the cost. According to data with the Petroleum Planning and Analysis Cell of the Ministry of Petroleum and Natural Gas, the excise duty on branded petrol is Rs. 20.66 a litre or nearly 28% of the total price of the fuel.

About 48 per cent of what one pays for petrol is central and state taxes. But on the flip side, as can be seen now, is that the consumer is forced to buy fuel at high prices when global price levels are elevated.

Subsequent to that excise duty reduction, the Centre had asked states to also lower Value-Added Tax, but just four states - Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh - lowered rates while others including BJP-ruled states ignored the call. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

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