NEW DELHI: Fuel prices on Tuesday witnessed a third straight daily increase as oil PSUs (public sector undertakings) ended their 82-day pause in rate revision. Petrol prices have been hiked by 54 paise per litre and diesel by 58 paise.
Petrol price in Delhi was hiked to Rs 73 per litre from 72.46, while diesel rates were increased to Rs 71.17 a litre from Rs 70.59, according to a price notification of state oil marketing companies.
Oil PSUs had put daily price revisions on hold soon after the government hiked excise duty on petrol and diesel by Rs 3 per litre each on March 14. The excise duty hike wasn’t passed on to consumers and oil companies, instead, set them off against the subsequent decline in retail prices.
India imports 85% of its oil needs, and retail fuel prices are benchmarked to international rates. Daily revision in fuel prices started from June 16, 2017, to reflect market dynamics in pump rates.
Oil companies kept accumulating the gains arising from the drop in international oil prices to a two-decade low in April, and set them off against the May 6 increase in excise duty on petrol by Rs 10 per litre and Rs 13 a litre hike in taxes on diesel.
The Re 1 per litre cost of an upgrade to ultra-clean BS-VI grade fuel from April 1 too was adjusted against the lowering of retail prices required due to the fall in international oil rates.
The government mopped up close to Rs 2 lakh crore in additional revenues from the March 14 and May 6 excise duty hikes. The total incidence of excise duty on petrol has risen to Rs 32.98 per litre and that on diesel to Rs 31.83. The excise tax on petrol was Rs 9.48 per litre when the NDA government took office in 2014 and that on diesel was Rs 3.56 a litre.