By BQ Desk
Auto fuel prices continue to surge in the country. Petrol prices have crossed the Rs 80-per-litre mark in the national capital.
A litre of petrol in Delhi now costs Rs 80.38, a record high, according to a tweet by ANI. It costs Rs 87.77 a litre in Mumbai. Diesel is now priced at Rs 72.51 a litre in Delhi and Rs 76.98 per litre in Mumbai.
The government is planning to adopt a wait and watch approach considering how the global oil market unfolds in a few days, Oil Minister Dharmendra Pradhan said on the sidelines of Global Mobility Summit in New Delhi today.
Two major external factors are contributing to this unavoidable situation in India, he said. “First, for benefiting their own economy, the U.S. is strengthening the dollar,” Pradhan said. “Indian currency is stronger compared to other currencies.”
Another reason, Pradhan said, is that certain issues in Iran, Venezuela and a crisis in Turkey are putting pressure on oil production. Even Though OPEC has assured to produce additional 1 million barrel per day of oil from July, they haven’t been able to meet their target. “These two basic factors are not in India’s hand.”
The rupee declined for the second straight week on Friday to test a record low of 72.10 a dollar as weakness across emerging market currencies and rising oil prices dragged it down further. Crude prices rose 29 percent from last year, according to Bloomberg data.
- Petrol: Rs 83.27 per litre, up 39 paise
- Diesel: Rs 75.36 per litre, up 44 paise
- Petrol: Rs 83.54 a litre, up 41 paise
- Diesel: Rs 76.64 a litre, up 47 paise
Opposition parties blame the inflated taxes for the high prices of fuels and have announced nationwide strikes and protests next week. The Congress party demanded that the centre should cut their excise duty in a manner akin to the previous governments which cut rates whenever international oil prices shot up.
“Let’s wait and not give any knee-jerk reaction,” said Pradhan.
Almost half of the retail selling price of the two fuels is made up of central and state taxes. Prices have been on a high since mid-August, rising almost daily due to a combination of drop in the rupee value and the rise in crude oil rates.
Earlier in the week, Finance Minister Arun Jaitley remained non-committal on cutting excise duty to cushion the spiralling petrol and diesel prices, saying international oil prices are volatile and have not shown any linear movement.
The Centre levies a total of Rs 19.48 a litre of excise duty on petrol and Rs 15.33 a litre on diesel. Besides, states levy a value added tax on these fuels. The lowest additional tax on fuels is levied in the Andaman and Nicobar Islands where a 6 percent sales tax is charged on both the fuel.
Mumbai has the highest VAT of 39.12 percent on petrol, while Telangana levies the highest VAT of 26 percent on diesel. Delhi charges a VAT of 27 percent on petrol and 17.24 percent on diesel.
The central government had raised its excise duty on petrol by Rs 11.77 per litre and that on diesel by Rs 13.47 per litre in nine installments between November 2014 and January 2016. The hike in excise duty was to shore up finances as global oil prices tumbled.
This more than doubled its excise collections from petro goods in the last four years—from Rs 99,184 crore in 2014-15 to Rs 2.29 lakh crore in 2017-18. States’ VAT revenue from petro goods rose from Rs 1.37 lakh crore in 2014-15 to Rs 1.84 lakh crore in 2017-18. Fuel prices in Delhi are the cheapest among all metros and most state capitals due to the city’s muted sales tax or VAT.
With inputs from PTI