Petrol prices hit an all-time high: Details here

In Mumbai, petrol is priced at Rs. 90.83 a liter and diesel at Rs. 81.07 a liter, thus, marking a record high for diesel in the city.

State-owned fuel retailers Indian Oil Corporation, Bharat Petroleum Corporation Ltd., and Hindustan Petroleum Corporation Ltd. had on Wednesday resumed daily price revision after nearly a month-long hiatus.

To recall, petrol prices were raised by 26 paise per liter and diesel by 25 paise on Wednesday.

The previous highest-ever rate of Rs. 84 a liter for petrol in Delhi was registered on October 4, 2018. Diesel too had scaled to an all-time high of Rs. 75.45 a liter.

In Mumbai, petrol had scaled to its highest price (Rs. 91.34) in October 2018.

The government had responded to that situation by cutting excise duty on petrol and diesel by Rs. 1.50 per liter in a bid to ease inflationary pressure and boost consumer confidence.

State-owned fuel retailers had cut prices by another one rupee a liter, which they recouped later.

However, no tax cut is under consideration at present, a senior government official said on Wednesday.

Though petrol and diesel rates are to be revised on a daily basis in line with benchmark international price and foreign exchange, government-controlled fuel retailers have been moderating rates since the pandemic broke out.

They did not pass on to the customers a reduction in price warranted from the slump in international oil rates witnessed due to demand erosion beginning March 2020.

While the increase in sales tax by state governments was promptly passed, they adjusted a steep increase in excise duty by the Central Government against the reduction in retail price warranted.

The government raised excise duty by Rs. 13 per liter on petrol and by Rs. 15 a liter on diesel in March and May to garner additional revenue of Rs. 1.6 lakh crore.

That adjustment of rate revision against excise duty hike resulted in a 52-day status quo in prices between March 17 and June 6, 2020.

This was followed by no change in rates between June 30 and August 15, and 58-day hiatus in petrol price revision, and a 48-day status quo on diesel rates.

Rates were again frozen after the last revision on December 7.