After 16 days of hike, fuel prices cut by 1 paisa
The Indian Oil Corporation Ltd website showed a reduction in petrol price by 60 paise while diesel was down by 59 paise. The company soon realised the error and rectified it.business Updated: May 30, 2018 22:20 IST
After continuous hike in fuel price for 16 consecutive days, Wednesday saw a marginal cut by 1 paise, but it came with its share of confusion.
The Indian Oil Corporation Ltd website showed a reduction in petrol price by 60 paise while diesel was down by 59 paise. The oil marketing company (OMC) soon realised the error and rectified it.
“There was a technical glitch in posting the selling prices of petrol and diesel on our website today (Wedneday),” the OMC said in a statement.
After the reduction, petrol price stood at Rs 78.42 and diesel at Rs 69.30 in Delhi.
Meanwhile, after the opposition Congress launched an attack on the Kerala government, the state on Wednesday reduced local taxes on petrol products by Re 1. The revised price will come into effect from June 1. It became the first and only state so far to reduce local taxes after fuel prices rose unabated for 16 consecutive days.
According to the Indian Oil website, the petrol price in Thiruvananthapuram stood at Rs 82.61 and diesel price at Rs 75.19 on Wednesday.
OMCs such as Indian Oil revise fuel prices everyday based on international crude price, currency fluctuation among other factors, to reflect it on their websites at 6am daily.
Crude prices softened as Saudi Arabia and Russia said they are discussing reviving output as prices jumped to levels last seen in 2014.
Brent futures that traded above $80 a barrel last week slumped to around $75 on Monday. But the fall in international price did not translate to immediate cuts in retail prices, as OMCs had stopped price revision during the Karnataka polls, and were adjusting the losses made during that period.
Faced with mounting pressure as fuel prices touched record highs, the government has begun a huddle to look at long-term solutions to tackle sudden spikes in global crude prices.
Though the demand has been to cut excise duty on fuel prices to give consumers immediate relief, the government so far has refused to step in with a knee jerk reaction.
The government had taken advantage of a sliding crude since November 2014 to shore up revenue by hiking excise duty on fuel nine times between November 2014 and January 2016.
But in the face of surging crude prices since December 2016, the government has slashed excise duty only once by Rs 2 in October 2017.
The central government levies a duty of Rs 19.48 a litre on petrol and Rs 15.33 per litre on diesel, while states collect sales tax and VAT which ranges from 26% to over 47% (Mumbai) of the fuel cost that consumers pay.
States also have a 42% share in central government’s revenue collections, including the collections from this excise duty due to the tax devolution under the 14th finance commission, so there has been demand that they also cut the local taxes on fuel.