The government will not step in to limit the hike in retail price of petrol and diesel according to Cabinet Minister for Petroleum and Natural Gas, Dharmendra Pradhan.

Speaking to journalists after a meeting to review the daily pricing regime in petrol and diesel by Public Sector Oil Marketing Companies Pradhan said, “Petrol and diesel in the country are benchmarked to the international price of these commodities. There has been a 13 per cent decline in the global refining capacity during August due to hurricanes Harvey and Irma in the United States of America.”

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. The price in Mumbai rose to Rs 79.48 a litre on September 12 from Rs 76.70 a litre.

“Over the past 3 months of June, July and August, the refinery capacity reduction has resulted in a 20 per cent hike in the price of diesel and an 18 per cent hike in the price of petrol globally,” he added.

According to Petroleum Policy and Analysis Cell, the average price of the Indian basket of crude oil rose from $ 46.56 a barrel in June to $ 50.63 a barrel in August.

Pradhan said that the Value Added Tax component on petrol and diesel has risen since the crude oil price and refinery transfer price of petrol and diesel have been falling. He said, “According to the tax statistics of the past three years, state tax on fuel has risen from 26 per cent to 34 per cent in Kerala, from 27 to 40 per cent in Maharashtra and from 20 per cent to 27 per cent in Delhi.”

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.

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