Petrol and diesel prices surged to record levels on Thursday as oil marketing companies (OMCs) hiked fuel rates across metro cities, except in Kolkata where rates fell following the state government’s decision of an excise cut. Petrol can be purchased at a price of Rs. 81 per litre in Delhi, according to a price notification of state-owned fuel retailers. A litre of petrol was retailed at Rs. 88.39 in Mumbai, Rs. 824.19 in Chennai and Rs. 82.87 in Kolkata. Diesel was sold at a price of Rs. 73.08/ litre in Delhi, Rs. 77.58 per litre in Mumbai, Rs. 77.25 per litre in Chennai and Rs. 74.93 per litre in Kolkata.
Except for halts on 5th September and 12th September, fuel prices have been increased almost daily across India over the past few weeks. According to experts, a weak rupee, high excise duty and expensive crude oil is pushing petrol and diesel prices to record highs under the daily dynamic pricing regime. High global crude oil cost has become a major concern for the country which is a net importer of oil.
Domestic fuel prices are dependent on international fuel prices on a 15-day average and the value of rupee, according to the reports. On Wednesday the rupee rose 51 paise against the US dollar to settle at 72.19, marking its biggest single-day rise since 25th May.
According to a Press Trust of India (PTI) report, Mumbai has the highest VAT (Value Added Tax) of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel. The total tax incidence on petrol comes to 45-50 per cent and on diesel, it is 35-40 per cent.
Globally, oil prices fell on Thursday, reversing some of the strong gains from the previous session, as economic concerns raised doubts about the ongoing fuel demand growth, stated a report by news agency Reuters. US West Texas Intermediate (WTI) crude futures were at $69.88 per barrel at 0635 GMT or 12:05 pm IST, down 49 cents, or 0.7 per cent, from their last settlement.
The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday reduced its forecast for 2019 global oil demand growth, pointing to economic risks. In its monthly report, OPEC said world oil demand next year would rise by 1.41 million barrels per day (bpd), 20,000 bpd less than last month.