On October 4, Finance Minister Arun Jaitley had announced a cut of Rs 2.50 per litre on both petrol and diesel prices and directed the state governments to implement the same.
Fuel prices continued the upward trend for another day on Tuesday with petrol and diesel prices in Delhi rising to Rs 82.26 per litre and Rs 74.11 per litre respectively. With today's price hike, prices of petrol and diesel in Mumbai have now reached 87.73/litre and Rs 77.68/ litre respectively.
On October 4, Finance Minister Arun Jaitley had announced a cut of Rs 2.50 per litre on both petrol and diesel prices and directed the state governments to implement the same. Several state government, mostly led by the BJP, cut VAT on fuel and brought down petrol and diesel prices.
Petrol and diesel prices were cut by a minimum Rs 2.50 on October 5 when the government's only second cut in excise duty of Rs 1.50 per litre and state-owned fuel retailers providing a Re 1 per litre subsidy came into effect. In BJP-ruled states, the reduction was higher as they matched the cut with a similar reduction in local sales tax or VAT.
But the prices were on the rise from the very next day. Petrol price was hiked by 18 paise a litre on October 6 and 14 paise on Sunday, according to daily price notification issued by state-owned oil firms.
Petrol, which in Delhi was cut to Rs 81.50 on October 5, on Sunday costs Rs 81.82. Similarly, diesel rates are hiked by 29 paise a litre each on October 6 and Sunday. It costs Rs 73.53 per litre in Delhi, up from Rs 72.95 on October 5, according to the oil firms. Petrol price on Monday was hiked by 21 paise a litre and diesel by 28 paise.
Oil Minister Dharmendra Pradhan on Monday said there was no question of going back on deregulation of fuel pricing despite the government asking state-owned firms to subsidise petrol and diesel by Re 1 per litre.
He said international oil prices touching a four-year high of USD 85 per barrel is a "challenge" that has resulted in fuel prices continuing to rise despite a one-off excise duty cut and public sector units (PSUs) subsidising fuel.
The combination of high international oil prices and a depreciating rupee has made imports costlier, resulting in retail pump rates shooting up.
Pradhan said the decision to cut excise duty on petrol and diesel by Rs 1.50 per litre each and ask oil PSUs to absorb another Re 1-a-litre was aimed at "giving relief to consumers".
Indian Oil Corp (IOC) Chairman Sanjiv Singh said the oil companies continue to have the freedom to change rates on a daily basis and the Re 1 per litre subsidy was a temporary move.
Delhi, which did not cut VAT on fuel, still has the cheapest fuel in all metros and bulk of state capital as it levies lower taxes. Mumbai despite reducing VAT on petrol still has the highest priced fuel.
Petrol prices had hit an all-time high of Rs 84 per litre in Delhi and Rs 91.34 in Mumbai on October 4. Diesel rates too had peaked to Rs 75.45 a litre in Delhi and Rs 80.10 in Mumbai. Following the twin decision, they fell to Rs 81.50 per litre of petrol in Delhi and Rs 86.97 in Mumbai.
After the centre cut excise duty by Rs 1.50 per litre and asked PSU oil firms to subsidise fuel by Re 1, Maharashtra and Gujarat governments were among the first to announce a matching Rs 2.50 cut.
(With PTI inputs)
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