There seems no stopping to the rising fuel prices in India. Today, the oil prices hiked for the eighth consecutive days. Petrol price saw a hike of 62 paise, while Diesel price was increased by 64 paise by the oil companies since the ending of 83-day freeze in fuel price revision during Lockdown.
In Delhi, the price was hiked from Rs 75.16 per litre to 75.78 per litre for petrol and Rs 73.39 per litre to Rs 74.03 per litre for Diesel, according to a price notification of the state oil marketing companies.
The revision is countrywide and will vary from state to state in accordance with the VAT imposed by the state government. This is about Rs 4 hike in fuel prices across India in nearly a week.
Why fuel prices are rising?
During the lockdown, the demands of Fuel plummeted to record lows which resulted in a drastic crash of crude oil prices. With no economic activity and depleted revenue, the central government imposed excise duty of Rs 10 per litre on petrol and Rs 13 per litre on Diesel prices. According to a report by care rating, the central government imposed duty was 270% of the base prices on petrol and 256% for diesel.
These duties were initially said to have no impact on the retail price of the Fuel because of the record low prices of crude oil in the global market. With, near to nil demand for fuel during Lockdown these changes were not passed onto the end consumer. Now as economic activities picking up in Unlock 1.0, the tax burden is passed on to the customers by the oil Marketer.
An Oil Marketing Companies (OMC) official said on media reports- “The oil market has turned the table in May, gaining over 50% from April’s prices, hovering over $30 a barrel and rising. If the trend continued, oil companies, which absorbed a big increase in the excise duty on petrol and diesel in May, start making losses on the sale of petrol and diesel. The sales volume of auto fuel is already down due to a demand squeeze by Covid-19 pandemic and lockdown, “. An increase in Rs 4-5 will balance the losses incurred.
When Narendra Modi Government took office in 2014 the excise tax was Rs 9.48 per litre for petrol and Rs 3.56 for diesel which has risen to Rs 32.98 per litre and Rs 32.83 per litre respect. This increased duty will generate an amount of Rs 1.6 lacs crores.
The impact of this record-breaking price hikes will be on all aspects of Indian lives which is already struggling for survival in this pandemic. Although one thing is for sure, the Indian government desperately wants us to be “Atamnirbhar”. And people need to brace themselves as more hikes on their ways in the upcoming days.