Monday, 20 August, 2018

Fuel prices revised; petrol, diesel to cost more

Fuel prices revised petrol diesel to cost more Karnataka polls over, petrol, diesel prices rise after 19 day freeze
Ginger Lawrence | 14 May, 2018, 09:55

With the rising prices due to the rising prices of crude oil, in view of the rising prices and in Karnataka elections, the government oil marketing companies kept petrol and diesel prices unchanged for 20 days.

Diesel prices on 14 May reached Rs66.14 per litre in Delhi, a record high. Petrol prices are up by 17 paise a litre in Delhi and Mumbai, and 18 paise a litre in Kolkata and Chennai, according to the Indian Oil Corporation. In Mumbai diesel prices have crossed the landmark of Rs 70, worrying people about the possible rise in inflation rates in the country.

Petrol and diesel prices were revised today after a gap of almost 21 days.

The government had asked OMCs to absorb Rs 1 per litre hike in their basket, but the companies have limited room for reduction in prices of fuel products. On April 23, the day before the last change in the prices of fuel in India, crude oil prices were around $74.50 per barrel. The crude oil prices fell on Monday as the United States has increased its drilling activity to increase output. It remains to be seen if the government takes action to resist an increase in oil prices or customers are left to deal with skyrocketing rates.

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Indian Oil Corp (IOC) chairman Sanjiv Singh last week said that the state-owned firms were "temporarily moderating" prices to avoid sharp spikes and panic among consumers. Also, the rupee has weakened to Rs 67 per U.S. dollar from Rs 66. There have been many occasions in the past where a government squeezed oil prices before an important event or elections to woo voters.

However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.

Though the quantum of is still to be worked out, sources said it could be graded with Rs 2 per litre cut on petrol and diesel to be considered at first.

Finance secretary Hasmukh Adhia and economic affairs secretary Subhash Garg have in the past weeks ruled out any immediate reduction in excise duty to cushion the increases warranted from a spike in worldwide oil price.