A day after opposition conducted a nationwide Bharat Bandh protesting against fuel prices, petrol prices soared to fresh record high on Tuesday. In Mumbai, petrol is now selling for Rs 88.26 per litre, a hike of 14 paise from previous record high levels. In national capital Delhi, petrol prices are nearing the Rs 81-mark, now retailing at Rs 80.87 mark. In Chennai, petrol prices were seen at Rs 84.05 while in Kolkata, one litre of petrol is selling for Rs 83.75.
Providing relief to the common man, Rajasthan and Andhra Pradesh governments’ have announced a slash in VAT. Notably, Andhra Pradesh chief minister N Chandrababu Naidu has announced a reduction in value-added tax (VAT), which is expected to cause the state’s exchequer Rs 1,120 crore. “During 2013-14, the crude oil prices were $105.52 per barrel. But when the price fell down to $46 dollars, too, the Centre did not reduce the petrol and diesel prices. Now, the crude oil costs $70 per barrel, but the Centre is increasing the petrol and diesel prices abnormally every day,” Naidu said. In effect the prices have been reduced by Rs 2 in the state.
On Sunday, Rajasthan chief minister Vasundhara Raje had announced a 4% point reduction in value added tax (VAT) on petrol and diesel, having the impact of reducing the petrol price in the state by Rs 2.5 per litre. The decision is expected cost the state Rs 2,000 crore. Oil was steady on Tuesday, supported by looming U.S. sanctions against Iran’s petroleum industry.
But prices were capped by signs that increased supplies by other major producers, including the United States and Saudi Arabia, could make up for the disruptions from Iran. U.S. West Texas Intermediate (WTI) crude futures were at $67.61 per barrel at 0112 GMT, up 7 cents from their last settlement, Reuters reported.