Petrol, diesel prices at 3-year high

Tribune News Service

New Delhi, September 13

With petrol and diesel prices close to three-year highs, the government today ruled out a review of daily revision and expressed confidence that prices will soften in coming days.

Since the daily revision was introduced in July, petrol prices have been slowly creeping up and cumulatively have gone up by a substantial Rs 7.32 to reach Rs 70.38 a litre in Delhi, the highest since August 2014 while diesel rates have risen by Rs 5.36 to Rs 58.72.

Petroleum Minister Dharmendra Pradhan said prices have stabilised and will soften in the coming days. He added that with daily price revision in place, it will be immediately passed on to consumers.

The government is facing criticism that it is filling up its coffers and the retail prices are at a three-year high when international crude oil prices are around $53 a barrel almost half of the $105 a barrel in 2014. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to buffer the falling international oil prices. In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre.

The duty hike resulted in government’s excise mop-up more than doubling to Rs 2.42 lakh crore in 2016-17 from Rs 99,000 crore in 2014-15.

Petroleum Minister Dharmendra Pradhan ruled out government stepping in to disrupt daily revision in petrol and diesel prices saying the reform will continue.

The minister said the drop in prices for over a fortnight after the daily price revision was introduced on June 16 has been ignored and only “temporary” phenomenon of rising trend is being highlighted.

Pradhan said the global prices have risen due to factors like hurricane in the US and there already are indications of “softening in the rates”. “As a result of these hurricanes, 13% of US refinery capacity was shutdown,” he said.

Defending the daily revision, Pradhan said dynamic fuel pricing is the most transparent model for consumers. The minister said the petroleum pricing mechanism in India is the most transparent in the world and the price-built up is available on the websites of all oil marketing companies.

Excise duty hiked nine times in 14 months

• Since the daily revision of prices was introduced in July, petrol prices have gone up by a substantial Rs 7.32 to reach Rs 70.38 a litre in Delhi, the highest since August 2014 while diesel rates have risen by Rs 5.36 to Rs 58.72
• Between November 2014 and January 2016, the government has raised excise duty on petrol and diesel on nine occasions to buffer the falling international oil prices
• In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre
• The duty hike resulted in government’s excise mop-up more than doubling to Rs 2.42 lakh crore in 2016-17 from Rs 99,000 crore in 2014-15.