Petrol, diesel prices hiked for first time after a month
Petrol and diesel prices were today hiked for the first time in more than a month on the back of rising international rates and weakening rupee. The increase of 16p/liter in petrol and 12p/liter in diesel came 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 1mn barrels/day.
IOC, Bharat Petroleum, HPCL didn't revise rates since June 26
The price of petrol in Delhi climbed to Rs. 75.7/liter from Rs. 75.55 and diesel to Rs. 67.50 a liter from Rs. 67.38, according to price notification of Indian Oil Corporation (IOC). 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.
Prices weren't raised in anticipation of OPEC decision: IOC Chairman
"We had not changed prices for a few days in anticipation of OPEC decision to raise production. But the 1mn barrels of additional production, which was to kick-in from July, has been overdone by the Iran issue," IOC Chairman Sanjiv Singh said. Singh said Iran produces 2.3-2.5mn barrels/day and the world searching for alternates to replace those volumes has put pressure on the prices.
US piling pressure on countries to end Iranian oil imports
While 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 to choke the Persian Gulf state's economic lifeline with sanctions over its nuclear programme.
Preceding month hikes had triggered demands for its reduction
In the preceding month or so, the rates had been cut in line with dropping international rates. Prices had hit an all-time high of Rs. 78.43/liter for petrol and Rs. 69.31/liter for diesel on May 30 this year. That peak had triggered demands for a reduction in excise duty but the government had ruled out any immediate cut.
Andaman and Nicobar levies the lowest VATs
The Center currently levies a total of Rs. 19.48/liter of excise duty on petrol and Rs. 15.33/liter on diesel. On top of this, states levy VAT - the lowest being in Andaman and Nicobar Islands where a 6% sales tax is charged on both fuels. Mumbai has the highest VAT of 39.12% on petrol, while Telangana levies the highest VAT of 26% on diesel.
Duty hikes by the Center in the last two years
The Center raised excise duty on petrol by Rs. 11.77/liter and that on diesel by 13.47/liter in nine installments between Nov'14 and Jan'16 to shore up finances as global oil prices fell, but then cut the tax just once in October 2017 by Rs. 2/liter.