Diesel prices hit a new high in four metros across the country on Wednesday. The artes of both petrol and diesel were marginally hiked today for a fourth straight day by Oil Marketing Companies (OMCs). Diesel can be bought today at Rs. 69.75 per litre in Delhi. Diesel can be purchased at Rs. 74.05 per litre in Mumbai, Rs. 72.60 per litre in Kolkata and Rs. 73.69 per litre in Chennai, according to daily price notification issued by state-owned oil firms.
Petrol is selling at a price of Rs. 78.18 per litre in Delhi today. In Mumbai, petrol is retailing at Rs. 85.60 per litre in Mumbai. Petrol is priced at Rs. 81.11 per litre in Kolkata and Rs. 81.22 per litre in Chennai.
The revised rates are applicable from 6 am on August 29, 2018.
The hike in rates of diesel is significant as it is mostly used in transportation of food and agricultural products and an increase in its price may lead to higher inflation. The surge in fuel prices is largely attributed to the recent rise in crude oil cost and the high excise duty levied on transportation fuel in the country, reported news agency IANS.
Mumbai has the highest VAT (Value Added Tax) of 39.12 per cent on petrol, while Telangana levies 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. The total tax incidence on petrol comes to 45-50 per cent and on diesel, it is 35-40 per cent.
"Indian petroleum demand has been resilient in FY18, and is reported to rise in July 2018 as per Ministry of Petroleum and Natural Gas. Crude import rose by 12.4 per cent reflecting higher consumption of petroleum products with a growth of 7.4 per cent in July 2018 on a year-on-year basis. Strong petroleum demand is supported by continued robust economic growth, rural demand, increased infrastructure spending and improved automobile sales. In the light of the aforesaid factors, we expect crude prices to be resilient in the near future, resulting in higher domestic transport fuel prices," said Abhishek Bansal, founder and chairman, ABans Group of companies.
Petrol and diesel will not come under the purview of Goods and Services Tax (GST) in the immediate future as neither the Central government nor any of the states is in favour on fears of heavy revenue loss.
Globally, oil markets were stable on Wednesday, buoyed by falling supplies from Iran ahead of US sanctions but held in check by rising production outside the Organization of the Petroleum Exporting Countries. (With inputs from agencies)