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Published On: Tue, May 22nd, 2018

Petrol,diesel hits new all-time high Govt. Says”not in our hand”

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Petrolpump-kvtC--621x414@LiveMintNEW DELHI : Fuel prices continued their upward march on Tuesday, with the petrol and diesel prices hitting record highs of Rs.76.87 and Rs.68.08 a litre in Delhi, the reference market for the country. The petrol price jumped 30 paise a litre on Tuesday from Rs 76.57 on Monday, while the diesel price climbed 26 paise a litre over the same period. Both fuels are becoming dearer due to the rise in global oil prices.

Feel like you’re being robbed blind by high fuel prices? Petrol price has touched a record high of Rs 76.24 per litre and diesel climbed to its highest ever level of Rs 67.57. Petrol was the costliest in Mumbai where high local taxes led to a price of Rs 84.40 per litre.
Diesel was the costliest in Hyderabad, where it was priced at Rs 73.45 a litre, again due to high local taxes. However, the Finance Ministry on Friday virtually ruled out reducing excise duty on petrol and diesel in the near future.

while Union Petroleum Minister Dharmendra Pradhan said the government would try to work out a solution soon, he also said that it was “not in our hand” and blamed the increase in fuel prices on “less production of oil in OPEC countries”.

Petroleum Minister Pradhan on Sunday blamed production cuts in the OPEC countries and the prospect of renewed sanctions on Iran by the United States for the rise in oil prices. The rising prices have prompted several industry bodies to urge the government to cut the excise duties on petrol and diesel, but the government has so far declined to bite the bullet.

Given these statements, can we expect more pain ahead in the future? Experts attribute the surge to the spike in global crude prices and high fuel taxes in the country. Brent crude oil hot $79 per barrel on Monday.
Meanwhile, Economic Affairs Secretary Subhash Chandra Garg ruled out any possible impact on economic growth due to the surge in oil prices. “On the macroeconomic front, the economy is doing well and we are not making any downward revision for growth or upward revision for fiscal deficit,” Garg said.

The hike is all set to burn a bigger hole in commuters’ pockets. Speaking to a news agency, a local in Delhi urged the government to bring down the prices and said, “The government must bring down prices of petrol. They must reduce excise duty and use other measures. The prices are already so high.”Fuel rates vary from state to state depending on the local sales tax or VAT.
Mumbai residents are also facing the brunt. A local told news agencies, “Why are prices so high in Mumbai when it is comparatively lower in Gujarat and Delhi? It is tough for those who have to travel everyday. We shell out Rs 120 for petrol regularly.”
On May 20, fuel prices had got past the all-time high levels reached in 2013, with petrol selling at Rs 84.07 in Mumbai that day. There were calls for the paring of tax on fuel in order to bring prices. However, the Finance Ministry had, on Friday virtually ruled out reducing excise duty on petrol and diesel in the near future.
The excise duty on petrol is Rs.19.48 a litre, which works out to 25.3% of the retail price of petrol in Delhi. The State VAT on the fuel, including VAT on the dealers’ commission, is Rs.16.28 a litre, which is 23.2% of the retail price. Together, the two taxes make up almost 50% of the retail selling price.
The situation is somewhat better in diesel, where the excise duty and State VAT make up 22.5% and 14.7% of the retail price

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