Petrol price was cut by Rs 2.42 per litre and diesel by Rs 2.25 per litre on Friday, even as the government raised excise duty on petrol and diesel by Rs 2 per litre each, the fourth such hike in the current fiscal.
The development comes in view of the crude oil prices falling to a six-year low on January 14 to $45.83 per barrel, the same level as in February 2009. While the crude oil prices have fallen by more than half since June 2014 when the price stood at $110 per barrel, the benefit has not been completely passed on to retail consumers.
This the second excise duty hike in the month, the previous one being on January 1 when the finance ministry had raised the basic excise duty on petrol and diesel by Rs 2 per litre for funding the “infrastructure development programme” of the country. The first hike was done in November when excise duty on petrol and diesel was raised by Rs 1.50 per litre, followed by a second hike of Rs 2.25 per litre and Rs 1 per litre for petrol and diesel respectively in December.
Reducing the price, Indian Oil Corporation, the country’s largest fuel retailer, announced that the new rates will be effective midnight tonight. In Delhi, petrol will cost Rs 58.91 a litre, the lowest in 44 months, as compared to Rs 61.33 a litre now. Similarly, diesel will cost Rs 48.26 a litre in the capital, the lowest since April 2013, as against Rs 50.51 currently. Petrol and diesel prices were last cut on December 16 by Rs 2 per litre each.
Earlier during the day, responding to the criticism of oil firms not cutting rates despite nearly 4 per cent fall in global rates since January 1, petroleum minister Dharmendra Pradhan had said that the pricing was “not in our hands” as the both petrol and diesel have been deregulated.
B Ashok, chairman of IOC, too had justified the decision arguing that oil firms were saddled with huge inventory which need to be compensated.