No end to fuel price hike, climbs to record high

Source: The Hitavada      Date: 11 Sep 2018 08:00:59


 

NEW DELHI,

 

Global crude oil cost has become a major concern for the country, the UK Brent crude oil price hovers around $77 per barrel

A DEPRECIATING rupee and expensive crude oil further pushed domestic fuel prices to new record highs on Monday even as a united Opposition led by the Congress staged a nation-wide shutdown protest against the rising prices.


Petrol in Delhi rose by 23 paise to Rs 80.73 per litre, while it rose by 22 paise, 25 paise and 23 paise in Kolkata, Chennai and Mumbai to Rs 83.61, Rs 83.91 and Rs 88.12 a litre respectively, as per the Indian Oil Corporation website.
Similarly, diesel price rose by 22 paise in Delhi and Kolkata to Rs 72.61 and Rs 75.46 per litre respectively, while it rose by 23 paise a litre to Rs 76.75 and Rs 77.09 per litre in Chennai and Mumbai respectively. Extra premium petrol is selling at Rs 90.87 in Mumbai. Fuel prices began an almost unbroken northward march since August 1. They fell only once on August 13 in the last 41 days. Prices surged on 29 days and remained unchanged on 11 days, and have been breaching record levels for more than a week.


Sector experts say a weak rupee and high excise duty are major factors for the rise in fuel prices. The rupee on Monday touched an all-time low of Rs 72.45 against the US dollar.


Also, high global crude oil cost has become a major concern for the country which is a net importer of oil. The UK Brent crude oil price hovers around $77 per barrel. Since the start of the calendar year, the petrol price in Delhi has gone up by 15.4 per cent from Rs 69.97 on January 1, 2018. The hike in diesel price has been even more steep. It has gone up by 22 per cent since January 1, 2018 when it was Rs 59.70.


The rising diesel price is expected to flare up inflation as the fuel is primarily used to transport most of the goods including agricultural products. As per the country’s pricing mechanism, the domestic fuel prices are dependent upon
the international fuel prices on a 15-day average and the value of the rupee.Meanwhile, the Andhra Pradesh government Monday announced a reduction of tax on petrol and diesel by Rs 2 a litre. Making the announcement in the State Assembly, Chief Minister N Chandrababu Naidu said the Centre earned a huge sum by hiking levies on fuel but did little to reduce the burden on the common man.


The State Government is currently levying 31 per cent
Value Added Tax plus Rs 4 as additional tax per litre of petrol and diesel.  The additional tax component is now being reduced to Rs 2 a litre, a senior official of the Commercial Taxes Department said separately.


Consequently, the price of petrol is expected to come down to Rs 84.71 a litre and diesel Rs 77.98 from Tuesday morning when the tax cut comes into effect.
The Chief Minister had earlier told the Assembly that the State Government was currently levying Rs 4 per litre VAT on petrol and diesel. The commercial taxes department later made the clarification.