New Delhi | Jagran Business Desk: Petrol and diesel prices continued to soar across the country on Saturday as fuel rates were hiked for the 12th consecutive day.

Over the last 12 days, petrol prices have increased by nearly Rs 3.60 while diesel rates have gone up by Rs 4.18 across the country.

The rising fuel rates have severely impacted the pockets of the pandemic-hit middle class across the country and experts have suggested that the salaried class will unlikely get a breather in the near future.

Why are petrol, diesel prices rising in India?

In India, petrol and diesel prices are dependent on international market rates. If rates are increased international market, then they would see a corresponding in India too or vice versa.

Crude oil prices had collapsed in April last year due to a fall in demand because of the coronavirus pandemic. However, the rates were increased to USD 63.49 for Brent crude from USD 40 soon after a vaccine rollout.

During the same period, Saudi Arabia, one of the key exporters of crude oil, also reduced its daily output by one million barrels to boost oil prices in the international markets to recover from the loses of the coronavirus pandemic.

Why the government isn't cutting taxes to reduce rates?

The central government has clearly stated that it will not cut excise duty on crude oil to give relief to consumers from the spiralling retail prices of petrol and diesel.

Replying in Rajya Sabha, Union Oil Minister Dharmendra Pradhan earlier this month had said that the Centre and state governments rely heavily on collections from taxes on crude oil "for meeting their developmental and welfare priorities".

"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.

"Both the states and the central government are raising taxes according to their developmental needs," he added.

Taxes make up for over 61 per cent of retail petrol price while they constitute more than 56 per cent of diesel pump rates.

The Centre had reduced the excise duty on petrol and diesel by Rs 2 per litre on October 4, 2017, and again by Rs 1.5 on October 5, 2018. It had also reduced the VAT on request from states and union territories.

'Don't regulate crude oil production and raise prices'

Amid rising fuel prices, Pradhan has urged the Organisation of the Petroleum Exporting Countries (OPEC) members to "stop regulating crude oil production" and ease rates.

He said that there is an "urgent need" to allow consumption-led recovery that has just taken roots in several emerging economies, noting that the rising fuel prices "are hurting the fragile global economic recovery".

"In the collective interests of both producing and consuming countries, prices should be reasonable and responsible. The price-sensitive Indian consumers are getting adversely affected by rising petroleum product prices," he said.

"It also affects demand growth, which could potentially impact the delicate aspirational economic growth trajectory not just in India but in other developing countries as well," he added.

Posted By: Aalok Sensharma