Petrol prices on a 55-month high

Petrol prices headed further north on Friday rising to its highest since September 2013, prompting the Opposition Congress to ask the government the reason behind the spike in rates when the global crude prices were much lower than what they were four years ago.

Petrol prices in Delhi touched Rs 74.08 per litre on Friday while the global crude prices were still at $73.78 per barrel. One barrel is roughly about 159 litres.

"Crude oil price is at $74 per barrel. This is still lower than $105 four years ago. So, why petrol and diesel prices are higher today than they were in May 2014," senior Congress leader P Chidambaram asked.

He also sought to know why the government is delaying bringing petroleum and petroleum products under the ambit of GST.

"The BJP boasts that it is ruling 22 states. Then why does the BJP government refuse to bring petroleum and petroleum products under GST?" he asked in a series of tweets.

Chidambaram said that for the last four years the government has lived off an oil bonanza. "Minus the oil bonanza the BJP government is clueless and floundering," he said.

The petrol and diesel prices have been on a rise almost since the beginning of the year but the government has stopped short of intervening in the price regime which has been left to be determined by the market forces on a day-to-day basis since June last year.

In between 2014 and 2016, the government raised excise duty on two fuels by nine times saying that it would reduce the levy when prices go up significantly.

In February, the government had abolished the additional excise duty on the fuels by Rs 6 but the effect was negated after a new road cess of Rs 8 per litre was introduced on the Union Budget day.

After crude oil prices started nearing $70 a barrel, the petroleum ministry had sought finance ministry's intervention to cut down the excise duty on petrol and diesel in the Budget. But Finance Minister Arun Jaitley's Budget did not affect any such cut.

The needle has also not moved much on the issue of bringing petroleum products under GST as they remain the largest source of revenue for the state governments.

Petroleum products still attract state and central levies such as excise duty and value-added tax. Experts have said that bringing petroleum in the GST could stabilise prices on the two fuels and bring petrol to around Rs 50 per litre.