After a month of respite, petrol and diesel prices were hiked again today as international rates are on the rise and rupee is on a decline. Petrol prices increased by 16 paise a litre and diesel by 12 paise. This hike comes after an 8-day self-imposed hiatus in rate revisions by state-oil firms in anticipation of softening international rates due to OPEC decision to raise output by 1 million barrels per day. The price of a litre of petrol in Delhi touched Rs 75.71, while a litre of diesel will set you back by Rs 67.50. The three state-owned fuel retailers, IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had not revised petrol and diesel prices since June 26 before which it was on a steady decline.
"We had not changed prices for a few days in anticipation OPEC decision to raise production leading to softening of international rates. But the 1 million barrels of additional production, which was to kick-in from July, has been overdone by the Iran issue," IOC Chairman Sanjiv Singh told PTI.
While the OPEC last month decided to raise production, the US is piling pressure on India, China, and other buyers to end all imports of Iranian oil by a November 4 deadline in a bid to choke the Persian Gulf state's economic lifeline with sanctions over its nuclear programme.
State-owned oil firms, who had in mid-June last year dumped 15-year practice of revising rates on 1st and 16th of every month in favour of daily price revisions, had last changed prices on June 26 when petrol price was cut by 14 paise and diesel by 10 paise. The decision to hold on to rates was taken without any elections looming around, Singh said, adding international prices have risen post-OPEC decision and oil companies have to "adjust retail rates accordingly".
Last month rates were slashed in accordance with dropping international rates. Before that, prices had hit an all-time high of Rs 78.43 a litre for petrol and Rs 69.31 for diesel on May 30 resulting in demands for a reduction in excise duty that the government eventually ruled out.
The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6% sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12% on petrol, while Telangana levies the highest VAT of 26% on diesel. Delhi charges a VAT of 27% on petrol and 17.24% on diesel.
The central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
This led to its excise collections from petro goods more than doubling in last four years - from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18.
(With PTI inputs)