The petrol price in Delhi on Saturday once again hit Rs 70 per litre, the first time since the excise duty cut was announced by the Narendra Modi government on October 4 last year.
The petrol price in Delhi on Saturday once again hit Rs 70 per litre, the first time since the excise duty cut was announced by the Narendra Modi government on October 4 last year. The petrol price in Delhi, which remained unchanged between December 31 and January 4 at Rs 69.97 per litre, went slightly up on January 5 at Rs 69.99 per litre, to finally hit Rs 70.13 per litre on January 6, reversing the excise duty cut benefit on the back of continuously rising crude oil price. Meanwhile, the petrol price in Mumbai is also inching back towards Rs 80 per litre.
Since October 4, the Brent crude oil price has gone up from $55 per barrel to $68 per barrel, and experts are pegging that it will soon hit $70 per barrel. The price effect was also seen in diesel price as well. The diesel price has been consistently over Rs 59 per litre in the last two weeks, at an all-time high.
This continuous rise in crude oil prices is putting an end to the three-year-long low price windfall, which allowed the government to hike excise duty by Rs 10 on petrol per litre and Rs 12 on diesel, and at a time when the country’s economic growth is expected to be slowest in four years and fiscal deficit is feared breached.
Here’s the interactive story of why the crude oil is on boil
According to Nomura, every $10 per barrel rise in the price will worsen India’s fiscal balance by 0.1% and current account balance by 0.4 % of GDP. “For a net oil importer like India, a sustained rise in crude oil price would have adverse macroeconomic implications,” it said in a report. India imports 82% of its total oil requirement and Brent crude oil makes up around 28% of India’s total imports.