Petrol price hits highest level, diesel at record high

Petrol price on Sunday hit Rs 74.40 a litre - the highest level under the BJP-led government, while diesel rates touched a record high of Rs 65.65, renewing calls for cut in excise duty to ease burden on consumers.

State-owned oil firms, which have been since June last year revising auto fuel prices daily, today raised petrol and diesel rates by 19 paisa per litre each in Delhi, according to a price notification.

The hike necessitated due to firming international oil prices, comes on back of a 13 paisa increase in rates of petrol effected yesterday and a 15 paisa hike in diesel, it said.

Petrol in the national capital now costs Rs 74.40 a litre, the highest since September 14, 2013 when rates had hit Rs 76.06. Diesel price at Rs 65.65 are the highest ever.

Oil Ministry had earlier this year sought a reduction in excise duty on petrol and diesel to cushion the impact arising out of international oil rates but Finance Minister Arun Jaitley in his Budget presented on February 1 made no concessions.

India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.

Jaitley had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.

Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT but just four of them - Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh reduced rates while others including BJP-ruled ones ignored the call.

The Central government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in Delhi and diesel Rs. 59.14.

Because of the reduction in excise duty, diesel prices had on October 4, 2017 came down to Rs 56.89 per litre and petrol to Rs 68.38 per litre. However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.

The October 2017 excise duty cut cost the government Rs. 26,000 crore in annual revenue and about Rs. 13,000 crore during the remaining part of the current fiscal year.

The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

State-owned oil companies - Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - in June last year dumped the 15-year old practice of revising rates on the 1st and 16th of every month . Instead, they adopted a daily price revision system to instantly reflect changes in cost. Since then prices are revised on a daily basis.