Govt blames Atlantic hurricanes for fuel price hike; cost break-up gives different picture
The petrol price per litre was ranging from Rs 70 to 79 in various Indian cities, while the diesel price was around Rs 61-62 a litre.business Updated: Sep 15, 2017 22:48 IST
The Centre attributed the sharp spike in fuel prices to slump in global refining capacity caused by recent Atlantic hurricanes that swept across the Caribbean and some parts of the United States.
But are volatile international crude prices the main villain? The price break-up of petrol and diesel in the country presents a different picture.
While global crude prices have nosedived 48% since September 2014 petrol price in Delhi remained at the same level even in September 2017.This is because the government has increased the excise duty on petrol nine times between November 2014 and January 2016.
The petrol price per litre was ranging from Rs 70 to 79 in various Indian cities, while the diesel price was around Rs 61-62 a litre.
“Crude prices are seeing the impact of hurricanes Harvey and Irma which caused the global refining capacity to dip by 13%. As a result international crude prices increased. Prices of petrol increased by 18% and diesel by 20% in global markets,” minister for petroleum and natural gas Dharmendra Pradhan claimed on Wednesday.
He hoped that global prices will cool down in the coming days.
But the price break-up for every litre of petrol in Delhi shows that state-run oil companies charge fuel dealers only Rs 30.70. But the excise duty, dealers’ commission and state VAT shoot up the retail selling price to over Rs 70 per litre.
Similarly, oil companies get diesel for Rs 26 per litre from the refineries and charge dealers Rs 30.56 a litre. But the retail price for the same in Delhi is Rs 58.74 per litre.
The petrol price rose to Rs 70.39 a litre in Delhi on September 14 from Rs 65.48 a litre on June 16, when the government introduced daily change in fuel prices.
Prior to that fuel prices were revised by oil marketing companies every fortnight, depending on international crude prices and exchange rates.
The rising fuel price was one of the key issues the BJP raised against the then Congress-led UPA government during the 2014 parliamentary elections. Now it is the Narendra Modi-led National Democratic Alliance (NDA) government which is facing criticism from the opposition parties as well as consumers for the hike.
The Congress has decided to launch a campaign to collect one million signatures against the hike in the fuel prices and hold a mega demonstration at Jantar Mantar on September 20.
First Published: Sep 15, 2017 22:48 IST