Fuel prices breached record levels on Thursday as Oil marketing companies (OMCs) raised petrol, diesel rates in the range of 20-22 paise per litre across four metros cities. Petrol can be purchased at a price of Rs. 79.51 per litre in Delhi, according to price notification of state-owned fuel retailers. A litre of petrol is vending at Rs. 86.91 in Mumbai, Rs. 82.62 in Chennai and Rs. 82.41 in Kolkata. Diesel is retailing today at a price of Rs 71.55 in Delhi, Rs. 75.96 per litre in Mumbai, Rs. 75.61 per litre in Chennai and Rs. 74.40 per litre in Kolkata.
Fuel prices have been on fire since mid-August, rising almost every day due to a combination of a drop in rupee value and rise in crude oil rates. However, the fuel rates were kept unchanged by OMCs on Wednesday after consecutively increasing it for ten days.
According to a recent report of Press Trust of India (PTI), the government will not cut excise duty on petrol and diesel to cushion spiralling prices, as it has limited fiscal space available to take any dent in revenue collections. The central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.
Globally, oil prices fell on Thursday as emerging market woes weighed on sentiment, while a deadline neared for a potential new round of US tariffs on another $200 billion of Chinese goods. The producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) said on Wednesday that it expected global oil demand to break through 100 million barrels per day for the first time later this year. Meanwhile, there are concerns that US sanctions against Iran, which will target the OPEC-member's oil industry from November, will tighten global supply. (With agencies inputs)