Diesel price broke the record by soaring high with Rs 61.88 per litre in Delhi on Tuesday. Whereas petrol prices have crossed Rs 71 in the national capital. There are concerns raised regarding high prices and a high import bill due to rise in prices recently.
Petrol price at Rs 71.27 per litre, effective 6 am, January 16, was the highest price recorded since August 2014, according to state-owned Indian Oil Corporation. Petrol prices were increased by 9 paise per litre in Delhi, Mumbai, Kolkata and Chennai on Tuesday. The prices have been increasing since December 2017 though. Diesel price have been raised by Rs3.4 and petrol price have been raised by Rs.2.09.
There are ten things that are important when it comes to rise in prices of petrol and diesel:
1.The petrol prices were at Rs 74 per litre in Kolkata, Rs 79.15 per litre in Mumbai and Rs 73.89 per litre in Chennai, while diesel prices were at Rs 64.54 per litre, Rs 65.9 per litre and Rs 65.23 per litre currently.
2. The global crude prices and the dollar-rupee exchange rate determine the domestic fuel prices.
3. Crude prices have rallied, sending Brent crude above $70 per barrel for the first time since December 2014.It is a major concern because India is an importer of its energy needs.
4. A production-cutting pact between the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers has given a strong tailwind to oil prices.
5. The oil prices are higher possibly due to a weaker dollar and expectations of stronger global economic prosperity.
6. The diesel prices had reduced to to Rs 56.89 per litre and petrol to Rs 68.38 per litre owing to the reduction in excise duty by the government by Rs 2 per litre in October 2017. However, a global rally in crude prices pushed domestic fuel prices higher.
7. The cutin excise duty by the government 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.
8. The government had raised excise duty on petrol and diesel on nine occasions to take away gains arising from dropping global oil prices between Novemeber 2010 to November 2016. The duty on petrol rate was increased by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise clear up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
9. The retail petrol prices have levitated 7 per cent and diesel 10 per cent since June in Delhi in spite of cut in taxes.
10. Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation ditched the 15-year old practice of revising rates on the 1st and 16th of every month last year in June. Instead, they adopted a daily price revision system to immediately manifest changes in cost. The prices have been altered since then on regular basis.
The increase in prices indicate towards broader inflation which is a matter of concern.