Price of petrol raised by 17 paisa, diesel by 23 paisa

Price of petrol raised by 17 paisa, diesel by 23 paisa

Rising crude oil, coupled with Indian government ruling out excise duty cuts and various states' being reluctant in reducing the Value-Added Tax on fuel prices, has left limited room for OMC to make any relaxation in the price of the product, especially diesel, which is now at a record high.

The determination of fuel prices and daily revision, adopted since last June, is based on the Indian crude basket prices and currency parity.

Diesel price in Chennai: Like Mumbai, similar hike was also made in Chennai.

As per estimates, state-owned oil marketing companies have lost around Rs 500 crore for the period that they absorbed the higher costs of petrol and diesel and the fall of the rupee against the U.S. dollar. Diesel was marked up by 21 paise to Rs 66.14 a litre, also a record high.

The revision in the fuel prices is significant because the rates had remained unchanged in the fortnight lead up to the Karnataka election.

Monday's increase is bound to bring back worries for motorists, especially of what could be a phase of consecutive fuel price hikes ahead as both global crude as well as product prices are firming.

Oil companies refused to comment on the issue.

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Chairman Sanjiv Singh last week said that the state-owned firms were "temporarily moderating" prices to avoid sharp spikes and panic among consumers. The rupee has tumbled in the last few days making imports more expensive. Also, the rupee has weakened to Rs 67 per USA dollar from Rs 66.62, making imports costlier. Oil companies in India have the mandate to carry out daily revisions in the prices of petrol and diesel.

Benchmark global diesel rates during this period have climbed from $84.68 per barrel to $88.63. Since then, the benchmark has now risen to $82.98.

Petroleum Minister Dharmendra Pradhan had in April, prior to the oil companies holding on the prices, refuted reports of the firms been asked to absorb price hikes.

The early morning fuel price hike triggered a fresh war of words between the government and the Opposition.

Even the wholesale price inflation of the country shot up for the month of April at 3.18 per cent due to high food and fuel prices. "How many more to be fired to fleece the pockets of ordinary people?"

According to Confused.com's latest fuel price index, petrol rose on average by 0.9p to 124.4p and diesel rose by 1p to 127.5p in the space of just a week.

And the speculation were on spot as the dynamic pricing system for transport fuels resumes on Monday, a couple of days after Karnataka elections. Because of the reduction in excise duty, diesel prices had on October 4, 2017, come down to Rs 56.

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