Fuel prices today witnessed yet another hike of 16 paise in Delhi, Mumbai and Kolkata. The price of petrol in Mumbai has reached a record high of Rs 86.72, costliest among all metro cities. In Delhi and Kolkata, the prices of petrol are at Rs 79.31 and Rs 82.22 respectively. In Chennai, the price of petrol has been raised by 17 paise to Rs 82.41. Diesel, too, has made new highs of Rs 71.34 in Delhi, Rs 75.74 in Mumbai, Rs 74.19 in Kolkata and Rs 75.39 in Chennai.
The continuous hike in fuel prices has been attributed to a sharp rise in international crude prices and a dramatic fall in the exchange value of the rupee against the US dollar. However, the opposition has upped the ante by demanding a cut in excise duty on petrol and diesel to provide relief to common people.
Currently, more than 50 per cent of petrol's retail price constitutes taxes and dealer commissions. In case of diesel, it is over 40 per cent. For instance, in the national capital, a litre of petrol today costs Rs 39.21 to the dealers. However, after taxes and commissions, the price of a litre of petrol goes upto Rs 79.31 for consumers in Delhi.
The central government levies Rs 19.48 excise duty on a litre of petrol and Rs 15.33 per litre on diesel. The state government tax vary from state to state. In Delhi, VAT on petrol is Rs 16.83 and Rs 10.46 a litre on diesel.
While the government is blaming the external factors for recent price hike, opposition parties such as Congress and TMC are asking roll back of the hike. "The Centre is indulging in extortion," Congress party spokesman Manish Tiwari yesterday said.
Similar demands of tax cut had been raised in past but the government did not budge as every rupee cut of excise on fuel will result in a loss of Rs 13,000 crore to the exchequer. India has the highest retail prices of petrol and diesel among South Asian nations.
Earlier this week, Union Petroleum and Natural Gas Minister Dharmendra Pradhan blamed 'external factors' for the rise in domestic prices of petrol and diesel, but said that the hike was temporary. He also said that the factors responsible for drop in production of crude oil have caused a spike in fuel prices in India.
Petroleum prices, which are determined by the cost of crude oil in global markets, may continue to go up as the international markets are under pressure due the US sanctions on Iran and Saudi Arabia's decision to cut oil production.