Petrol and diesel prices being raised

Petrol, diesel and aviation fuel prices will be dearer as the government has increased taxes and duties on crude and petroleum products.

While the oil marketing companies have already decided to hike the prices of aviation fuels, oil secretary S Sundaresan said on Friday evening that his ministry will inform oil retailers to hike prices “in a few hours”. Till 8pm on Friday, the final hike was still to be announced.

The proposed price hike follows the reimposition of 5% import duty on crude oil and hiking the import tariff on petrol and diesel from 2.5% to 7.5%. Oil companies were quick to send an ‘impact assessment’ of the new taxes to the ministry. “There would be an impact of Rs1.24 per litre of petrol due to the hike in excise duty and Rs1.47 due to the hike in import duties,” said an oil company official.

According to estimates prepared by the companies, the new taxes will increase their costs by Rs2.71 per litre of petrol and Rs2.55 per litre of diesel. “The costs will have to be passed on to consumers. There is no question of the oil companies absorbing it,” S Sundaresan, secretary to the ministry of petroleum and natural gas, said soon after the budget was presented.