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No petrol price cut for you even after oil prices drop from $106 to $26: Top 10 reasons why

Sat February 06 2016, 5:32 pm
  • oil price, oil price news, oil price hike, petrol price, petrol price cut, petrol price hike, diesel price, diesel price cut, diesel price hike,

    Record production in the US, weakened demand from the Eurozone and emerging economies like China and Brazil, and Iran’s entry into the international market have effectively cut prices of crude oil for India, from $106 per barrel in July 2014 to $26 in January 2016 - a 75 percent drop over 15 months. So, why are you not seeing evidence of this price-cut at your local petrol and diesel station? Here are top 10 reasons why: (Reuters)

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    1. As global crude prices reach a 11-year low, the Centre (in states the local governments) are increasing excise duties and value-added tax (VAT), effectively ensuring you pay the old astronomical prices. (AP)

  • oil marketing companies, bpcl, hpcl, ioc, sensex

    Shares of oil marketing companies such as BPCL, IOC and HPCL gained upto 3 per cent on Tuesday after they hiked petrol and diesel prices on Monday. (AP)

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    3. Although India imports more than 80 percent of its fuel requirements, which means declining global prices should, theoretically, have seen sharp declines in retail petrol and diesel prices, Indian consumers of petrol and diesel now pay about double the global rate. (Reuters)

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    4. Retail prices of petrol and diesel prices in three states - Assam, Uttar Pradesh and Gujarat - show a variation of less than 10 percent during the current financial year, 2015-16, according to an IndiaSpend analysis. For instance, the petrol price in UP rose Rs 2 per litre, when global oil price halved over the same period. (Reuters)

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    5. Indian prices stay high because oil marketing companies (OMCs), such as Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd and Reliance Industries Ltd., add their margins, the central government adds excise, state governments add their own (value-added) taxes, and the dealers (petrol pumps) get their commission. The total of these is the retail price of the fuel you pay. (Reuters)

  • bpcl, hpcl, ioc, petrol, diesel

    Shares of oil marketing companies such as BPCL, IOC and HPCL gained upto 3 per cent on Tuesday after they hiked petrol and diesel prices on Monday. (AP) (Reuters)

  • oil price, oil price news, oil price hike, petrol price, petrol price cut, petrol price hike, diesel price, diesel price cut, diesel price hike,

    7. The price at which OMCs sell petrol to dealers (petrol pumps) has been halved in two years. Over the same period, retail petrol prices have come down only by 15 percent. (Reuters)

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    8. The value-added taxes (VAT) imposed by states have more or less remained the same, but excise duties - both basic and additional - imposed by the Centre have doubled between 2014 and 2016. (Reuters)

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    9. So, you pay more taxes on diesel and petrol than the price of fuels: The addition of central taxes on diesel is higher than those on petrol. Central taxes per litre of diesel rose to four times its value in April 2014 - from Rs 4.52 per litre to Rs 17.33 per litre in February 2016. (Reuters)

  • oil marketing companies, bpcl, hpcl, ioc, sensex

    Shares of oil marketing companies such as Bharat Petroleum Corporation, Indian Oil Corporation and Hindustan Petroleum Corporation gained on Tuesday after Credit Suisse maintained its "outperform" rating on fuel retailers (AP)

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