The price of diesel in Delhi crossed Rs 80 a litre for the first time on Thursday after the 19th consecutive rate hike since June 7, even as international oil prices plunged by 5.44%.
The petrol price surge, which was paused for a day on Wednesday after the 17th hike in a row, also saw a jump of 16 paise a litre on Thursday. Petrol is now selling in Delhi’s pumps at Rs 79.92 a litre and diesel at Rs 80.02.
Retail rates of auto fuels differ from city to city across the country due to variations in local levies.
Indian fuel retailers fix petrol and diesel rates every day on the basis of prevailing rates of the two products in the international market on the preceding day. International product prices move in tandem with global crude prices.
The state-run fuel retailers – Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) – declined to give reasons for the price hike on Thursday despite a sharp fall in international oil prices. Public sector oil companies control more than 90% of the domestic fuel retail trade.
The benchmark Brent crude on Wednesday plunged sharply by 5.44% to $40.31 a barrel. It softened further on Thursday by 1.98% and was hovering around the $39.5 per barrel-mark. India’s average crude oil import price in April was $19.90 a barrel, $30.60 a barrel in May and about $40.5 a barrel in June (as on June 24), according to official data.
A petroleum ministry official, requesting anonymity, said the government has no role in the daily revision of petrol and diesel prices as they are deregulated products. The government deregulated the pricing of petrol on June 26, 2010 and diesel on October 19, 2014.
Executives of the two public sector oil companies, speaking on condition of anonymity, said petrol and diesel rates are high because of a significant jump in central levies and state-level taxes, while international crude oil prices are low.
Ruling Bharatiya Janta Party (BJP) leader Amit Malviya tweeted that diesel was costlier than petrol in Delhi because of higher levies imposed on the fuel by the local government.
“VAT [value-added tax] on diesel was 16.75%, which Delhi government, in May 2020, abruptly increased to 30%. During the same period, VAT on petrol increased from 27 to 30%,” he said.
The Aam Aadmi Party (AAP), which rules Delhi, blamed the BJP-led Central government for the unprecedented price hike. “Loot of Lotus! Fuel prices hiked for 19 days in a row,” it tweeted. Lotus is the BJP’s party symbol.
In a tweet, the Congress party said the hike in “excise duty on petrol was 258% and diesel was 820% since 2014”. It added, “BJP Govt promised to improve the life of every Indian, the reality is far from it, the govt has made matters only worse.”
According to IOC’s website, the total taxes on petrol and diesel are more than their basic rates. While the basic price of petrol in Delhi was Rs 22.11 a litre on June 16, taxes on the fuel (both central excise and state levies) were Rs 50.69 a litre. Similarly, the basic price of diesel was Rs 22.93 a litre, but the total taxes levied on the fuel were Rs 49.43 a litre.
IOC did not disclose the current pricing details. While auto fuel rates are theoretically changed every day, the company provides price build-up of petrol and diesel only fortnightly.
Taking advantage of low international oil prices, the Union government raised excise duties on petrol and diesel twice – first on March 14 by Rs 3 a litre each, and later on May 5 by Rs 10 a litre on petrol and Rs 13 on diesel. A Re-1 per litre hike in excuse duty means an additional Rs 14,500 crore in revenues to the exchequer.
Almost all states have raised VAT on petrol and diesel since mid-March.
The Delhi government raised VAT on petrol and diesel to 30% on May 5. Consequently, retail prices of petrol in the city jumped by Rs 1.67 per litre and diesel by Rs 7.10 a litre.
Earlier, the local levies on petrol and diesel were 27% and 16.75%, respectively. Diesel in Delhi also attracts an additional Rs 250 per kilolitre air ambience charge.