Petrol and diesel prices in the country touched their highest levels on Tuesday. Oil marketing companies (OMCs) increased fuel rates for the tenth consecutive day in Delhi, Mumbai, Kolkata and Chennai. Petrol price in Delhi rose to a record Rs 79.31 per litre and diesel climbed to a fresh high of Rs 71.34, according to price notification of state-owned fuel retailers. A litre of petrol is selling at Rs. 86.72 in Mumbai, Rs. 82.41 in Chennai and Rs. 82.22 in Kolkata. Prices in Delhi are the cheapest in all metros and most state capitals due to lower sales tax or VAT (Value Added Tax).
Diesel can be purchased today at a price of Rs 75.74 per litre in Mumbai, Rs. 75.39 per litre in Chennai and Rs. 74.19 per litre in Kolkata. Petrol and diesel prices vary from state to state due to local levies. The revised rates are applicable from 6 am on September 4, 2018.
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. The fall in Indian currency also affects fuel rates. The Indian rupee slumped 16 paise against the US dollar to trade at a life-time low of 71.37 in early trade today.
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.
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.
Globally, oil prices rose on Monday, supported by concerns that falling Iranian output will tighten markets once US sanctions bite from November, but gains were limited by higher supply from OPEC and the United States.
Production by the Organization of the Petroleum Exporting Countries rose 220,000 barrels per day (bpd) in August to a 2018 high of 32.79 million bpd, a Reuters survey showed. Meanwhile, trade disputes between the United States and other major economies, including China and the European Union, are expected to hurt oil demand if they are not settled soon. (With agencies inputs)