Explained: Petrol up by Rs 18.55 since March 2020, diesel up by Rs 16.38; here's why fuel price hike may continue
New Delhi | Jagran Business Desk: In what affect people across the country, especially the salaried class, fuel prices on Friday scaled new highs in India for the fourth consecutive day. In a notification, state-owned companies said that petrol prices were hiked by 26 to 29 paise while diesel prices surged by 34 to 38 paise across major cities in the country.
With this hike, petrol prices in Delhi crossed the Rs 88-mark for the first time. Similarly, one litre of diesel in Delhi will now cost Rs 78.38. Meanwhile, petrol in Mumbai and Kolkata will cost 94.64 per litre and Rs 89.44 per litre respectively.
In last 12 days, prices of petrol and diesel have been increased by Rs 4.13 and Rs 4.26 respectively and it looks like consumers won't get a breather from rising fuel prices very soon as the central government has plans to cut taxes.
Union Petroleum and Natural Gas Minister Dharmendra Pradhan had on Wednesday said that India mostly depends on oil imports to meet its needs which is why fuel rates are governed by international prices.
Pradhan had said that the Centre has to increase prices depending upon the rates in the international markets which is "market mechanism" that is followed by oil companies.
Notably, the central government had hiked excise duty on fuel rates after international benchmark rates plunged to decade lows in April last year. Since then, the retail petrol price in India has increased by Rs 18.55 per litre while diesel rates have gone up by Rs 16.38.
Pradhan, meanwhile, on Wednesday had said also said that fuel prices are rising because of international rates which have crossed USD 61 per barrel for the first time "in more than a year on improving demand outlook amid the global rollout of COVID-19 vaccines".
He had also said that retail prices in India depend on three components -- base price that reflects the cost of international oil, central excise duty and state taxes.
Both central and state governments rely heavily on collections from taxes on these products for meeting their developmental and welfare priorities, he said.
"They need some resources... (and) this (taxing petrol and diesel) has been a proven and substantial route by all the governments, whether the state governments or the central government," he had said.
Interestingly, the central government had also imposed an agricultural infrastructure cess on fuel rates. However, Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2021, had said that it won't affect final consumers as the Basic Customs Duty will be reduced by the government.
Posted By: Abhinav Gupta