The petrol price in Mumbai has topped Rs 81 per litre mark, at a four-year-high, even as Brent crude oil price has been sliding down for the past three days. The petrol price on February 6 was hike by 7 paise and diesel price was by 8 paise per litre. The petrol price in Mumbai was Rs 81.24 per litre; Delhi Rs 73.38; Kolkata Rs 76.07; and Chennai Rs 76.12, while diesel price in Mumbai was Rs 68.39 per litre; Delhi Rs 64.22; Kolkata Rs 66.89; and Chennai Rs 67.73 per litre at a record high. The Brent price, on the other hand, was at $66.88 per barrel, down 74 cents, or 1.1%, from the previous close, Reuters reported.
In October last year, the central government announced an excise duty cut of Rs 2 per litre on petrol and diesel to cushion the impact of the rising crude oil price, following which four states, too, cut retail VAT on fuel. However, since then, the Brent crude oil price has surged nearly $13 per barrel, briefly touching the $70 per barrel mark and petrol and diesel prices have surged nearly by Rs 4 per litre, negating the impact of the cut.
Oil minister Dharmendra Pradhan, who has long been demanding to bring fuel under the ambit of the GST, in a written reply to Lok Sabha told, “Four state governments and one Union territory have reduced the VAT on petrol and diesel.” He did not mention the names of the states.
After the excise duty cut by the centre, Dharmendra Pradhan had urged state governments to cut retail VAT on petrol and diesel by 5 percentage point, however, only Gujarat, Maharastra, Madhya Pradesh, Himachal Pradesh and Union Territories cut the VAT, despite 19 states in the country being the BJP ruled states.
On June 26, 2010, the government had deregulated fuel prices in the country, and from June 16, oil companies do the daily revision of petrol and diesel prices instead of the fortnightly revision. The rallying crude oil price in the last four months has ended the low price windfall for the Narendra Modi government which allowed them to hike the excise duty on petrol by Rs 12 and diesel by Rs 13.77 per litre since April, 2014, before cutting it by Rs 2 per litre last October.
As global oil experts expect Brent price to touch $80 per litre and even $100 per litre by next year, it is likely that petrol and diesel prices in the country will keep going up. The government, however, has dropped hints that there will be an excise duty cut, once and if, crude oil price breach comfortable level. At present level, Finance Minister Arun Jaitley said that the government is bearing the shock. He also clarified that states are not in favour of bring petrol and diesel under the GST yet and it will take some more time to happen.