The petrol and diesel prices have been cut almost daily in last ten days on the back of falling crude oil price after it topped $71 a barrel last month. The diesel price since February 7 has fallen by Rs 1.2, while petrol price has gone down by 89 paise.
The diesel prices on February 16 were: Delhi Rs 63.02 per litre; Kolkata Rs 65.68; Mumbai Rs 67.11; and Chennai Rs 66.45. The petrol prices were: Delhi Rs 72.52 per litre; Kolkata Rs 75.22; Mumbai Rs 80.39; Chennai Rs 75.21. Despite the downward trend, petrol price in Mumbai continues to remain above Rs 80 a litre.
Meanwhile, the benchmark Brent crude oil price stayed flat on Friday despite US dollar sliding for the past couple of days. The Brent crude oil price fell 3 cents to settle at $64.33 a barrel, while the US West Texas Intermediate (WTI) crude was up 74 cents to $61.34 a barrel. The international crude oil prices are one of the several factors that directly affect the fuel prices in India.
Since October last year petrol and diesel prices have risen continuously due to the crude oil price rally. While crude oil price rose significantly by $16 a barrel to later fall down by nearly $7 a barrel in the last four months, the petrol and diesel prices rose by Rs 5 and Rs 7 per litre respectively.
To cushion the impact of higher crude oil prices, the central government announced an excise duty cut of Rs 2 per litre in October, followed by VAT cut by four states. It was also expected that Finance Minister Arun Jaitley will announce some relief in the Budget 2018, it is understood that tight fiscal situation did not leave the room.
The government had earlier indicated that it may announce another excise duty cut, when and if, crude oil prices touched $75 a barrel.
The Indian government in 2010 announced deregulation of the fuel prices in India and it is now being revised by the oil companies based on free-market theory. The oil companies used to revise petrol and diesel prices fortnightly, however, since June 16, 2017, daily revision of prices kicked in. Since then, oil companies have revised prices between 1 paisa and 15 paise, which often go unnoticed.