After remaining stagnant for 19 days, fuel prices have risen across the country for the third day in a row. Petrol prices were increased by 15 paise on Wednesday in Delhi and Mumbai, while it was raised by 14 paise and 16 paise in Kolkata and Chennai respectively. State-owned oil companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision, following which fuel prices are revised at 6 am every day. Diesel prices were increased by 21 paise in Delhi and Kolkata and by 22 paise and 23 paise in Mumbai and Chennai respectively.
Petrol now costs Rs 75.10 in Delhi a litre, Rs 77.79 in Kolkata, Rs 82.94 in Mumbai, Rs 77.93 in Chennai, Rs 76.31 in Bengaluru, and Rs 79.55 in Hyderabad.
A litre of diesel on the other hand will cost citizens in Delhi Rs 66.57, Rs 69.11 in Kolkata, Rs 70.88 in Mumbai, Rs 70.25 in Chennai, Rs 67.71 in Bengaluru and Rs 72.36 in Hyderabad.
According to reports, diesel is at its most expensive Delhi has ever seen, while petrol prices are the highest since September 2013.
Fuel rates are determined by primarily two factors - the global crude oil rate and the rupee-dollar forex rate. Brent crude oil had touched $79.47 a barrel, its highest since November 2014, following concerns that US sanctions on Iran are likely to restrict export of crude from one of the biggest producers in the Middle East. Moreover, the rupee is also down more than 6% against the US dollar so far this year. Although the rupee recovered a little on Wednesday, it is still not far from 68 against the dollar.
However, before the Karnataka polls, fuel prices remained unchanged for 19 days. State-owned oil marketing companies are estimated to have lost about Rs 500 crore as they absorbed higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar during this period. Oil PSUs that had kept rates unchanged for nearly three weeks before Karnataka polls despite a spike in input cost, reverted to daily revision in prices as soon as the state voted to elect a new government on Saturday.
Oil PSUs have refused to acknowledge if the freeze followed a government diktat so as to help the ruling BJP with the polls in Karnataka, where it has been vying to come to power. Indian Oil Corp (IOC) Chairman Sanjiv Singh last week said that the state-owned firms were 'temporarily moderating' prices to avoid sharp spikes and panic among consumers.
Finance Secretary Hasmukh Adhia and Economic Affairs Secretary Subhash Garg have in the past weeks ruled out any immediate reduction in excise duty to cushion the increases warranted from a spike in international oil price.
The BJP-led government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then also cut the tax once in October last year by Rs 2 a litre.
(With PTI inputs)