Published: Sun, May 27, 2018
Money | By Wilma Wheeler

Driver WARNING - Petrol and diesel prices could rise over 140p per litre

Driver WARNING - Petrol and diesel prices could rise over 140p per litre

Petrol price in Mumbai crossed Rs 85 on Thursday, May 24, and is fast approaching the Rs 80 mark in Delhi, with no relief from continuous hike in fuel prices.

With petrol and diesel prices being hiked for the 10th day in a row, the government today said it is working on a long-term solution to address the volatility and frequent revisions in rates.

The reason behind the increasing fuel prices is the increase of the price of crude oil in the global market and the weakening of INR against United States dollars.

Presently, the state government charges 20 percent Value-Added Tax and 4 percent cess on both petrol and diesel.

Fumed over the price hike, locals in Bhopal asked the government to reduce the prices. The kerosene price is revised every fortnight by few chheltrums, according to an employee with Bhutan Oil Distributor.

Rising global crude prices are largely behind the surge, but fuel is also heavily taxed by India's state and federal authorities, accounting for about half the cost of petrol and 40 percent of the diesel price.

But the economic experts say that it is not possible.The Narendra Modi government has a fiscal deficit target of 3.2% for the fiscal year 2018-19. In the last ten days petrol price has shot up by Rs 2.54 a litre while diesel price has gone up by Rs 2.51. Basically, the problem is "taxes" which are imposed by the government on petrol and diesel.

This brings us to the crucial question about the efficacy of the policy of fuel price deregulation, introduced by the Manmohan Singh government in June 2010, which has been repeatedly used by the Modi government for refusing to intervene and order excise duty cuts in prices of petrol and diesel. State sales tax or VAT varies from state to state.

"We have said that the state would be ready to bring the petroleum products under GST regimen".

What one can be assured of is, in-spite of rising barrel prices during the tenure of the Congress-led government, they had managed a great job in keeping hold of the prices of crude oil in India. "The Centre has given Maharashtra in last four years what was not given in the last 20 years", he claimed.

While HPCL, another state-owned OMC, recorded a drop of 4 per cent in its March quarter profit, the overall FY18 net profit was highest ever for the company at Rs 6,357 crore.

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