Petrol at 4 years high, diesel at all time high after the new revision

Petrol price today hit a four-year high while diesel rates touched an all-time high in the national capital, renewing calls for the government to cut excise tax rates.

State-owned oil firms raised petrol and diesel prices by 18 paise per litre each in Delhi, which have been revising fuel prices daily. 

Petrol in the national capital now costs Rs 73.73 a litre, the highest since September 14, 2014 when rates had hit Rs 76.06. Diesel price at Rs 64.58 is the highest ever, with previous high of Rs 64.22 on Feb 7.

Jaitley had raised excise duty nine times 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. Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT but just four of them – Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh – reduced rates while others including BJP-ruled ones ignored the call.

The central government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in Delhi and diesel Rs. 59.14. Because of the reduction in excise duty, diesel prices had on October 4, 2017 come down to Rs 56.89 per litre and petrol to Rs 68.38 per litre. However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.

The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

State-owned oil companies – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – in June last year dumped the 15-year old practice of revising rates on the 1st and 16th of every month . Instead, they adopted a daily price revision system to instantly reflect changes in cost. Since then, prices are revised on a daily basis.