Delhi: Petrol hits new high as taxes bump up crude impact
Diesel prices were also raised by 24 paise to Rs 74.38 per litre, which is still Rs 1.09 away from the fuel’s record of Rs 75.45 a litre
NEW DELHI: Petrol made history at Rs 84.20 per litre in Delhi on Thursday after oil marketing companies raised pump prices by 23 paise per litre, the second since they resumed daily revision on Wednesday after a month’s gap.
Diesel prices were also raised by 24 paise to Rs 74.38 per litre, which is still Rs 1.09 away from the fuel’s record of Rs 75.45 a litre.
Petrol prices in other states too hit record, though at different levels because of the difference in VAT rates. Similarly, the increase in diesel rates too varied due to the incremental impact of the state levy. Pump prices are set to rise further as benchmark Brent crude continued its rally towards the $55/barrel-mark on Saudi Arabia’s output cut pledge. The rollout of Covid-19 vaccine and a sharp drop in US crude stockpiles further supported the rally.
With these factors lifting sentiment, UBS has projected oil prices to rise to $60/barrel. This will certainly result in costlier fuel for consumers because of the higher level of taxes.
Petrol had touched its previous high at Rs 84 a litre in Delhi on October 4, 2018. Diesel too made record that day as Brent ruled at $80/barrel. Though crude is way cheaper at present, pump prices are making record because of the tax hikes by the Centre and the states in the last two years. Today, Central and state taxes account for about 60% of the price of a litre of petrol or diesel.
The Centre had raised excise duty on petrol by Rs 13 per litre and diesel by Rs 16 in two tranches on March 16 and May 5. The revisions had come when consumption had slumped to a record low due to the countrywide lockdown, the government has chosen to persist with it even though fuel sales are nearly back to pre-Covid levels.
This is a key reason why excise duty has emerged as the only positive among major tax heads when the Centre’s tax collection is shrinking. Excise mop up has risen 47% to nearly Rs 2 lakh crore during April-November as fuel sales return to near-normal.