State-run oil marketing companies (OMCs) have hiked petrol and diesel prices sharply on Thursday after a day’s gap. Petrol price has increased by 26 paise per litre and diesel prices have been hiked by 7 paise per litre
In Delhi, petrol price is just one hike away from touching Rs 98 per litre, while diesel price has increased to Rs 88.30 per litre. Diesel price has seen a milder upward revision today, compared to past hikes since May 4.
However, both petrol and diesel prices have hit a fresh all-time high after today’s revision. In Mumbai, petrol price has increased to Rs 103.89 per litre and diesel costs Rs 95.79 per litre. Prices have also gone up to new highs in other major cities across the country.
At the moment, petrol is retailing over Rs 100 per litre in at least 15 cities. The highest retail price of petrol in the country is Rs 108.67 in Sri Ganganagar, Rajasthan. Diesel has also crossed Rs 100 per litre in this city.
It may be noted that state-run oil companies have hiked both petrol and diesel prices by over Rs 7 per litre since May 4. Prices of the two auto fuels have been hiked 30 times since the first week of May.
Domestic fuel prices are rising since May due to several factors, but the rising in international crude oil rates seems to be the biggest trigger. Petrol and diesel prices in India are likely to rise further as international oil rates continue to consolidate.
In view of the sharp rise in fuel prices, many citizens have asked the government to reduce taxes levied on petrol and diesel. India’s combined state and central taxes on fuel are the highest in the world.
Commenting on the demand, oil minister Dharmendra Pradhan recently indicated that it would be difficult for the Centre to cut excise duty on fuel at the moment due to higher government expenses during the Covid-19 second wave. States have also expressed concern about rising expenditure to support their unwillingness to cut VAT.
While higher fuel taxes have proved to be a strong source of revenue for the Centre and states during the pandemic, citizens continue to suffer. Higher fuel prices have hurt people who depend on fuel for their livelihoods.
Higher fuel prices have also led to a rise in inflation and experts are worried that it may stall demand and economic recovery momentum after the second wave subsides.