The petrol and diesel prices in India have been on a rising spree in the last three months on the back of higher crude oil prices. While many people were hoping some Budgetary relief from Arun Jaitley in Budget 2018, they were left disappointed. The petrol price on February 2 rose by 5 paise, while diesel price remained unchanged.
Petrol prices in four major cities are Rs 73.1 per litre in Delhi, Rs 75.79 per litre in Kolkata, Rs 80.96 per litre in Mumbai and Rs 75.82 per litre in Chennai. Diesel prices were Rs 64.11 per litre in Delhi, Rs 66.78 per litre in Kolkata, Rs 68.27 per litre in Mumbai and Rs 67.62 per litre in Chennai. At this level, the petrol prices are at a three-year-high and diesel prices are at record high.
In the Budget 2018, the government cut excise duty by Rs 2 per litre and additional excise duty by Rs 6 per litre, but replaced it with a Road and Infrastructure Cess of Rs 8 per litre, rebalancing the cuts. In October last year, the government had announced an excise duty cut of Rs 2 per litre on petrol diesel. Following centre’s decision, some states like Gujarat and Maharashtra, too, cut retail Value Added Tax (VAT) on fuel price. Overall, the petrol and diesel prices fell down by nearly Rs 2.5 per litre.
However, in the last four months, the Brent crude oil price surged by $13 per barrel from $55 to $68 per barrel, after briefly topping $70 mark in mid-January. Subsequently, petrol and diesel prices shot up by over Rs 3 per litre in the last four months. The tight fiscal situation of the government is understood to have left no room for relief in fuel prices. Notably, the three-year-long low oil price windfall allowed the government increase the excise duty on petrol by Rs 12 per litre and diesel by Rs 13.77 per litre since April 2014, before reducing it in October last year.