Published: Mon, October 08, 2018
Money | By Ralph Mccoy

Petrol, diesel prices start rising again

Petrol, diesel prices start rising again

Diesel however dropped in price by 70 paise and was being sold at Rs. Rs 76.75 after the state of Maharashtra provided a relief of Rs. 1.56 per litre.

After global oil prices fell in 2014, the Modi government raised the excise duty on petrol by Rs 11.77 a litre and on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances, but then reduced the tax just once in October previous year by Rs 2 a litre.

Prior to Friday's cut, petrol price had risen by Rs 6.86 a litre and diesel by Rs 6.73 since mid-August - the most in any six-week duration after the daily price revision was introduced in mid-June previous year. The move to bring down domestic fuel prices came amid worldwide crude oil rates soaring to 2014 highs in the past few days. Since August 2018, the states of Karnataka, Rajasthan, Andhra Pradesh, West Bengal and Kerala cut fuel prices by anywhere between Re 1 to Rs 2.

A day after the Centre reduced the excise duty on petroleum products and most States responded with a cut in the value-added tax (VAT), Congress president Rahul Gandhi on Friday appealed to Prime Minister Narendra Modi to bring petrol and diesel within the ambit of the Goods and Services Tax (GST). The rate of diesel has been hiked by Rs 0.29 in Delhi and Kolkata, and by Rs 0.31 in Mumbai and Chennai.

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In India, nearly half of the price of retail fuel is due to taxes. The states where the prices have been decreased are Gujarat, Chhattisgarh, Tripura, Jharkhand, Uttar Pradesh, Madhya Pradesh, Maharashtra, Himachal Pradesh, Haryana, Assam, Arunachal Pradesh, Uttarakhand, Jammu and Kashmir and Goa, said reports.

Jaitley said that in addition to excise duty being cut by Rs 1.5 per litre, oil marketing companies would also take a hit of Re 1 per litre as well.

While the government's decision to cut taxes on petroleum products is a positive change, the move's impact could be limited if the crude price in the global market continues to go up and the rupee falls in near future.

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