Diesel price on Sunday hit a fresh record high after rates were hiked by 60 paise per litre while petrol price was up 35 paise, taking the cumulative increase in rates in 15 days to ₹8.88 a litre and ₹7.97 respectively.
Petrol price in Delhi was hiked to ₹79.23 per litre from ₹78.88, while diesel rates were increased to ₹ 78.27 a litre from ₹77.67, according to a price notification of state oil marketing companies.
Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT.
Taxes make up for nearly two-thirds of the retail selling price. As much as ₹50.69 per litre, or 64%, in petrol price is due to taxes — ₹32.98 is the central excise duty and ₹17.71 is local sales tax or VAT.
Over 63% of the retail selling price of diesel is taxes. Out of the total tax incidence of ₹49.43 per litre, ₹31.83 is by way of central excise and ₹17.60 is VAT.
Petrol in Mumbai costs ₹86.04 per litre and diesel is priced at ₹76.69.
The 15th daily increase in rates since oil companies on June 7 restarted revising prices in line with costs after ending an 82-day hiatus in rate revision, has taken diesel prices to fresh highs. Petrol price too is at a two-year high.
Prior to the current rally, the peak diesel rates had touched was on October 16, 2018 when prices had climbed to ₹75.69 per litre in Delhi. The highest-ever petrol price was on October 4, 2018 when rates soared to ₹84 a litre in Delhi.
When rates had peaked in October 2018, the government had cut excise duty on petrol and diesel by ₹1.50 per litre each. State-owned oil companies were asked to absorb another ₹1 a litre to help cut retail rates by ₹2.50 a litre.
Oil companies had quickly recouped the ₹1 and the government in July 2019 raised excise duty by ₹2 a litre.
The 82-day freeze in rates this year was imposed in mid-March soon after the government hiked excise duty on petrol and diesel to shore up additional finances.
The government on March 14 hiked excise duty on petrol and diesel by ₹3 per litre each and then again on May 5 by a record ₹10 per litre in case of petrol and ₹13 on diesel. The two hikes gave the government ₹2 lakh crore in additional tax revenues.
Oil PSUs Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), instead of passing on the excise duty hikes to customers, adjusted them against the fall in the retail rates that was warranted because of a decline in international oil prices to two-decade lows.
International oil prices have since rebounded and oil firms are now adjusting retail rates in line with them.
In 15 hikes, petrol price has gone up by ₹7.97 per litre and diesel by ₹8.88 a litre.