Fuel prices might dip after 14 consecutive days of price hike

Sean Reid
May 28, 2018

Similarly, diesel prices in the national capital soared to Rs 69.17 per litre today, the highest recorded ever. Guess what! Now you will pay over Rs 86 per litre in Mumbai, over Rs 78 per litre in New Delhi and Rs 81 per litre in Chennai.

The drop in crude oil rate came after Saudi Arabia, the de facto leader of OPEC (Organization of the Petroleum Exporting Countries) and Russian Federation, another top producer, mutually agreed to increase their outputs by almost 1 million barrels per day.

The rises are due to the price of oil increasing to more than 80 U.S. dollars, combined with a weakening of the pound. Brent crude is now priced around $76 per barrel.

Highest petrol price Mumbai stood at Rs 79.99 (on October 3) in 2017, while the average crude oil price of Indian basket stood at an average of mere $56.43 in FY18.

Congress activists, on the other hand, staged a demonstration on Thursday at different filling stations in Cuttack protesting against the fuel price hike. Brent, the benchmark worldwide rate for petrol, continues to remain in the high range increasing the pressure on the government to cut excise duty on petrol and diesel.

When asked whether petrol and diesel would be brought under the ambit of Good and Services Tax (GST), Pradhan underscored that the aspect was being considered by the Centre.

OMCs take into consideration the daily performance of worldwide crude oil, government's excise duty and state's Value-Added Tax for deriving final retail prices in India.

When the Modi Government came to power in April 2016, the crude oil was trading at $107.

The tax, which may come in form of a cess, will kick in the moment oil prices cross United States dollars 70 per barrel, sources privy to the development said. Prices have peaked across the country, fuelling speculations the ruling Bharatiya Janata Party (BJP) government may be mulling an excise duty cut for auto fuels. And now that the global prices of crude are yet again creeping up slowly but surely, the oil marketing companies are quick to pass the burden to the consumers.

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