Diesel Prices Rise To Record High, Petrol At Three-Year Peak: 10 Points

Here are 10 things to know:

1. Currently, petrol prices were at Rs. 74 per litre in Kolkata, Rs. 79.15 per litre in Mumbai and Rs. 73.89 per litre in Chennai, while diesel prices were at Rs. 64.54 per litre, Rs. 65.9 per litre and Rs. 65.23 per litre respectively.

2. Domestic fuel prices are mostly determined by global crude prices and the dollar-rupee exchange rate.

3. Crude prices have rallied, sending Brent crude above $70 per barrel for the first time since December 2014, a worry given that India imports most of its energy needs.

4. A production-cutting pact between the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers has given a strong tailwind to oil prices.

5. A weaker dollar and expectations of stronger global economic growth has also pushed oil prices higher.

6. The government had cut excise duty by Rs. 2 per litre in October 2017, when petrol price reached Rs. 70.88 per litre in Delhi and diesel Rs. 59.14. Because of the reduction in excise duty, diesel prices had on October 4, 2017 come down to Rs. 56.89 per litre and petrol to Rs. 68.38 per litre. However, a global rally in crude prices pushed domestic fuel prices higher.

7. The October 2017 excise duty cut cost the government Rs. 26,000 crore in annual revenue and about Rs. 13,000 crore during the remaining part of the current fiscal year.

8. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by Rs. 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop up more than double to Rs. 242,000 crore in 2016-17 from Rs. 99,000 crore in 2014-15.

9. State-owned oil companies – Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation – in June last year dumped the 15-year old practice of revising rates on the 1st and 16th of every month . Instead, they adopted a daily price revision system to instantly reflect changes in cost. Since then prices are revised on a daily basis.

10. Despite a cut in taxes, retail petrol prices have risen 7 per cent and diesel 10 per cent since June in Delhi.