Prices of diesel hit an all-time high of Rs 64.40 per litre in Delhi, while petrol prices were at Rs 73.55, highest in over four years. The last time petrol prices were higher was in September 2013 when it was Rs 76.06 per litre in the city.
In a bid to bring in transparency in pricing of fuels, the government had changed the fortnightly revision of prices to a daily routine in June 2017. Since then prices of petrol at the pump have gone up by over 12 per cent, while for diesel the increase has been even steeper at over 18 per cent. At the same time, prices of crude oil for the Indian basket has shot up by over 63 per cent. Oil marketing companies have been able to somewhat cushion the increase due to the appreciation of the Indian currency against dollar. India imports nearly 82 per cent of its crude oil requirement every year and currency fluctuation plays a major role in pricing of the fuels at the retail level.
Yet these prices do not reflect what the consumer should be normally paying. Crude prices have fallen drastically from the highs of September 2013, when retail prices were higher than today. At that time, the price of the Indian basket of crude oil had shot up to $110 per barrel, almost 48 per cent more than today. The invisible factor between the two is taxes.
Prices of the two fuels in India have witnessed a steady increase in the past four years as the government has increased excise duty on the two fuels a dozen times in this period. As a result, the Narendra Modi led NDA government gets Rs 10 per litre excise duty more on petrol than what the Mammohan Singh led UPA government got in 2014. For diesel, the government gets almost Rs 11 per litre more than the previous government. Excise duty on petrol has gone up by 105.49 per cent (including the only time when duties were cut by Rs 2 per litre last October), while on diesel it has shot up by over 240 per cent during the time.
It is not that the central government alone has reaped the benefit of lower crude prices. Even the state government, led by Arvind Kejriwal in the case of Delhi, which gets its share through VAT has seen its kitty bulge by over 31 per cent or Rs 3.74 per litre on petrol and nearly 44 per cent or Rs 3.4 per litre on diesel. Even the petrol pump owners have seen their commission go up by 80 per cent on petrol and 111 per cent on diesel between April 2014 and March 2018.
In a nutshell, everybody except the consumer, has and is benefitting from benign oil prices.