Achche Din? Petrol, Diesel Prices Scale New Highs

Roman Schwartz
September 10, 2018

Fuel prices have yet again witnessed a fresh hike, with petrol being sold at a record high rate of Rs. 80.38 per litre in New Delhi, and diesel at Rs 72.51 per litre. To ease the burden a bit we are reducing the price on petrol and diesel by Rs 2 per litre.

Rahul Gandhi-led Congress party has called the Bharat bandh today. One factor, the high level of taxes on the retail price, is a fiscal choice. Petrol and diesel prices have risen steadily since August 1 of this year, with rising global fuel prices and a depreciating rupee against dollar. Notably, the rapid fuel price hike in the country is caused due to a combination of rising in crude oil rates and fall of the Indian rupee against the U.S. dollar.

The Central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October previous year by Rs 2 a litre. The government is yet to disclose such a strategy. On the other hand, Mumbai is affected most with the hike as petrol and diesel are being sold at Rs 88.12 and Rs 77.32 per litre. The spike in prices has renewed calls for cut in excise duty but Finance Minister Arun Jaitley has remained non-committal, saying worldwide oil prices are volatile and have not shown any linear movement. On Tuesday, former Finance Minister P Chidambaram had tweeted: "Relentless rise in prices of petrol and diesel is not inevitable".

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Meanwhile, the Rajasthan government announced a four percent reduction in value-added tax (VAT) on petrol and diesel on September 9.

"Since the central government is not responding on (reducing the) petrol prices, Naidu is doing the exercise to give relief to the public", sources in the TDP said. In Chennai, petrol costs Rs 83.91 and diesel Rs 76.98.

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