Petrol and diesel prices at fresh highs after another hike
Petrol and diesel prices on Tuesday climbed to fresh highs in the country as rates were hiked after a three-day hiatus. Prices of both were hiked by 35 paise per liter each, according to price notifications of state-owned fuel retailers. The increase took petrol prices to a fresh high of Rs. 87.30 a liter in Delhi and to Rs. 93.83 in Mumbai.
At Rs. 84.36, diesel records an all-time high in Mumbai
Meanwhile, diesel rates rose to Rs. 77.48 per liter in the national capital and to an all-time high of Rs. 84.36 in Mumbai. Prices were last hiked by 30 paise on February 5. Rates have risen by Rs. 3.59 per liter in the case of petrol and by Rs 3.61 for diesel in 2021.
Brent crude oil price rose above $60 per barrel
Brent crude oil price on Monday rose above $60 per barrel for the first time in more than a year on improving demand outlook amid the global rollout of COVID-19 vaccines.
Why is there a hike in price?
Mukesh Kumar Surana, head of Hindustan Petroleum Corporation Ltd. had said that a sudden spike in international oil prices because of a perception of mismatch in demand and supply as well as a cut in production by Saudi was fuelling the retail price hikes. 25-30 percent of the retail pump rates are dependent on cost and the rest are Central and State taxes.
Excise duty and VAT on fuels
Oil Minister Dharmendra Pradhan while replying to a question in Rajya Sabha said that excise duty levied by the Centre makes up for Rs. 32.98 per liter of the price of petrol in Delhi, and sales tax or VAT of the state government constitutes Rs. 19.55. For diesel, the central excise adds up to Rs 31.83 and VAT to Rs 10.99, he had said.
Government raised taxes by a record margin in mid-March 2020
Besides, the price includes a dealer commission of a minimum of Rs. 2.6 per liter on petrol and Rs. 2 on diesel. Retail petrol rates have risen by Rs. 17.71 per liter since mid-March 2020 after the government raised taxes by a record margin to mop up gains arising from a fall in international oil prices. Diesel rates have gone up by Rs. 15.19.