Economy

Petrol, diesel prices scale new highs on rupee woes

Petrol, diesel prices scale new highs on rupee woes

Despite a nationwide bandh on Monday, the surge in fuel prices seen to offer no immediate respite. "There is no explanation on the part of the respondent/government on why fuel prices remained static for approximately 22 days during the Karnataka elections".

Petrol price in Delhi climbed to Rs 80.87 per litre, while in Mumbai it inched up to Rs 88.26.

Petrol prices in Parbhani touched Rs 80 on January 8 this year.

Fuel prices in Delhi are the cheapest among all metros and most state capitals due to lower taxes. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where 6 per cent sales tax is charged on both the fuels.

The Centre on Monday ruled out an immediate reduction in excise duty on petrol and diesel but indicated that it could consider options of selling NRI bonds or deposit schemes to foreigners to stem the slide in the rupee.

This was announced by Chief Minister N. Chandrababu Naidu while introducing a resolution in the Assembly on Monday urging the Central government to slash excise duty and Income Tax dividend and cess being levied on petroleum products to bring further relief to people. Rajasthan, Tamil Nadu and Assam, all of which have a higher sales tax on petrol, have a lower petrol price than Kerala.

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After refusing any cut in sales tax for over two years, the LDF government finally slashed the sales tax.

"Bringing oil in GST is not a solution". The cut was based on the prices prevailing on May 30. Petrol price has risen by Rs 3.65 a litre and diesel by Rs 4.06 per litre - the biggest increase in rates witnessed in any month since the launch of daily price revision in mid-June past year. Now, three months after, the prices are Rs 84.06, and Rs 77.98. On the other hand, the taxes imposed by the Narendra Modi government on fuel is considerably high. Here is the case of petrol: from Rs 9.20 a litre it shot up to Rs 19.48 per litre for petrol.

On March 1 this year, the state had secured a litre of petrol for Rs 54.60.

According to oil companies, refinery gate price of petrol, without considering any central or state tax and dealers commission, is Rs 40.45 per litre.

Delhi High Court advocate Ajay Tejpal said, "This is a rare instance of the issue of petrol and diesel prices, which has huge consumer interest, being examined legally".