Petrol, diesel prices inch close to Rs 80 mark after 17th hike in a row

Fuel prices were hiked by the oil marketing companies again on Tuesday. Petrol and diesel will now cost Rs 79.76 per litre and Rs 79.40 per litre respectively in Delhi.

The price of petrol is increased by 20 paise a litre while that of diesel by 55 paise a litre.

Notably, oil marketing companies have been adjusting retail rates in line with costs after an 82-day break from rate revision amidst the Covid-19 pandemic. These firms on June 7 restarted revising prices in line with costs.

Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or value added tax (VAT).

The increase in rates since June 7 is the highest in any fortnight. When petrol and diesel pricing was deregulated in April 2002, oil companies revised rates every fortnight in line with the cost. They switched to daily price revision in May 2017 to allow cost to reflect instantaneously in retail rates.

Rates have been increased across the country and vary from state to state.

According to pricing data, the maximum rates have increased in any fortnight was Rs 4-5 per litre.

Prior to the current rally, the peak diesel rates had touched was on October 16, 2018, when prices had climbed to Rs 75.69 per litre in Delhi. The highest-ever petrol price was on October 4, 2018, when rates soared to Rs 84 a litre in Delhi.

When rates had peaked in October 2018, the government had cut excise duty on petrol and diesel by Rs 1.50 per litre each. State-owned oil companies were asked to absorb another Rs 1 a litre to help cut retail rates by Rs 2.50 a litre.

Oil companies had quickly recouped the Re 1 and the government in July 2019 raised excise duty by Rs 2 a litre.

Taxes make up for nearly two-third of the retail selling price. As much as Rs 50.69 per litre, or 64 per cent, in petrol price is due to taxes - Rs 32.98 is the central excise duty and Rs 17.71 is local sales tax or VAT.