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Petrol and diesel rates reduced by 15 paise per litre
The total diesel price cut is, however, steeper compared to petrol. Oil companies have so far reduced diesel rates for the fifth time in last seven days, making it cheaper by 95 paise a litre. Diesel rates started softening after it surged to an all-time high at ₹89.87 a litre on July 15 and stayed there for 34 days
State-run fuel retailers on Tuesday cut petrol and diesel rates by 15 paise per litre. The second petrol price reduction in three days made it cheaper by 35 paise after it remained at record ₹101.84 a litre for 36 days since July 17.
The total diesel price cut is, however, steeper compared to petrol. Oil companies have so far reduced diesel rates for the fifth time in last seven days, making it cheaper by 95 paise a litre. Diesel rates started softening after it surged to an all-time high at ₹89.87 a litre on July 15 and stayed there for 34 days.
Indian Oil Corporation (IOC) pumps are now selling petrol at ₹101.49 per litre in Delhi and diesel at ₹88.92 a litre. While fuel rates of IOC in Delhi are the benchmark for the entire country, retail prices of the two fuels differ from place to place because of variations in state taxes and local levies.
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After mid July, state-run fuel retailers kept auto fuel rates frozen at record levels in a departure from the policy of aligning petrol and diesel rates daily by tactically using minor gains of falling international oil prices to offset the need of raising pump rates.
Domestic rates of petrol and diesel have now been slashed after international crude oil plunged sharply by 7.66% last week. Benchmark Brent crude that closed at $69.51 per barrel on August 16 with a 1.5% fall, maintained a downward trend for the entire week and closed at $65.18 on Friday, its lowest since May 21 amid worries of surging Covid-19 cases, increased supplies of crude oil in the market from large producers, and demand concerns.
International oil prices, however, saw a strong rally on Monday after seven days of losses on weaker dollar and strong global equities market. Brent jumped as high as $69.48 a barrel during the intraday trade on Monday, but settled about 5.5% up at $68.75. On Tuesday, it opened marginally low at $68.66, but quickly gained 0.54% at $69.12 in early trade.
While international oil prices impact pump rates of auto fuels because India imports more than 80% crude it processes, steep taxes are the other reason for high rates of petrol and diesel.
In Delhi, central levies account for 32.3% of petrol’s price and state taxes, 23.07%, according to an official data of August 1. On diesel, Central taxes are over 35.38% while state taxes are about 14.62%.
Through 2020, as global crude prices fell, the Central government raised excise duty on the fuel to shore up its finances. States too followed suit -- with revenues hit on account of the pandemic. According to official data, petroleum sector contributed ₹371,726 crore central excise revenue in 2020-21, and ₹202,937 crore state levies or value added tax (VAT).
