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Petrol, Diesel prices to decline as crude oil prices drop internationally

28 May, 2018, 11:20 | Author: Melinda Barton
  • Dharmendra-Pradhan in Bhubaneswar

According to Indian Oil Corporation, petrol is being sold at Rs 78.27 per litre in Delhi and at a record rate of 86.08 a litre in Mumbai. In Delhi, Kolkata, Mumbai and Chennai, it is selling at Rs 68.75, Rs 71.30, Rs 73.20 and Rs 72.58 per litre respectively.

Bhubaneswar: Oil Minister Dharmendra Pradhan on Thursday said that the reduced value of the Indian rupee in comparison to the United States dollar is causing fuel price hike. Petrol has gone up from 119.78ppl to 128.29ppl and diesel has increased from 122.54ppl to 131.15ppl. He said that the oil marketing companies operate on a thin margin and they can not do much if the worldwide cost of oil rises. It must be mentioned here that the government permitted daily price revisions of petrol and diesel in June 2017 to help state-run oil marketing companies (OMCs) cut losses. Many states are against this. This is nearly identical to price trends under the current NDA government now when petrol prices have already crossed all-time high levels and have shot up to Rs 85.93 in Mumbai and may rise further till September the in absence of any duty cut by the Centre and the states. We should remember that NDA government raised excise duty on nine occasions between November 2014 and January 2016 increasing its excise collections from mere Rs 99,184 crore in FY 15 to Rs 2,42,691 crore on FY17 and nearly similar collections in FY 18.

"Unfortunately, the higher oil price has come at a time when the pound has weakened considerably against the dollar". Data reveal that the central tax on diesel has increased by more than 300 percent, while on petrol it has jumped by more than 100 percent since 2013.

Reacting to the statement of the Petroleum Minister, Odisha Finance Minister Sashi Bhushan Behera said he was trying to hide his inefficiency to control the hike in fuel prices. The price rise will impact on the prices of essential commodities and services and will have a far reaching cascading affect down on the consumers of goods and services through the network of transport and communication agencies across the country. The oil price issue indicates several economic implications for India, going forward. Diesel, however, has become dearer faster than petrol, which has reduced the gap between petrol and diesel prices to about Rs 9, an unusual occurrence if one analyses the price difference in the last one-and-a-half decades. In Delhi diesel was being sold at Rs 69.06 per litre up by 16 paise from previous day. Populist projects like distribution of gas cylinder to village women through attractive programme named Pradhan Mantri Ujjwala Yojana has been already started.

Indian Oil (IOC), the country's top refiner, will turn to its traditional oil suppliers, mostly in the Middle East, if USA sanctions against Iran result in supply disruptions, its head of finance said.



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