Petrol, diesel prices near all-time high

Auto fuel prices reached near all-time high on Wednesday after oil marketing companies lifted the 30-day pause.

Now, you will need to pay ₹83.97 a litre for petrol in Delhi while it will be ₹90 in Mumbai, ₹86.75 in Chennai and ₹85.44 a litre in Kolkata. Price revision is 26 paise a litre over last revised prices of December 7.

Similarly, diesel prices rose by 25 paise a litre over last revised prices of December 7. Accordingly, diesel prices in Delhi is now ₹74.12/litre, while it is ₹80.78 in Mumbai, ₹79.46 in Chennai and ₹77.70 in Kolkata.

Highest ever rate of ₹84 a litre for petrol in Delhi was touched on October 4, 2018. Diesel too had scaled to an all-time high of ₹75.45 a litre on October 4, 2018. On that day, the government cut excise duty on petrol and diesel by ₹1.50 per litre in a bid to ease inflationary pressure and boost consumer confidence. Alongside, state-owned fuel retailers cut prices by another ₹1 a litre, which they recouped later.

No duty cut

However, there is no indication from the Finance Ministry for any duty cut.

Though petrol and diesel rates are to be revised on a daily basis in line with benchmark international price and foreign exchange, government-controlled fuel retailers have been moderating rates since the pandemic broke out.

They first did not pass on to the customers a reduction in price warranted from the slump in international oil rates witnessed due to demand erosion beginning March 2020. While they promptly passed on an increase in sales tax by State governments such as the one in Delhi, they adjusted a steep increase in excise duty by the Central government against the reduction in retail price warranted.

The government raised excise duty by ₹13 per litre on petrol and by ₹15 a litre on diesel in two instalments in March 2020 and May 2020 to garner additional revenue of ₹1.6-lakh crore. That adjustment of rate revision against excise duty hike resulted in a 52-day status quo in prices between March 17 and June 6, 2020.

This was followed by no change in rates between June 30 and August 15, and 58-day hiatus in petrol price revision and 48-day status quo on diesel rates from September 22 and October 2, respectively.