Petrol crosses Rs 87-mark to hit record high in Delhi, diesel at Rs 77.48

Petrol prices in Mumbai stood at Rs 93.83 on Tuesday as compared with Rs 93.49 yesterday. In Bangalore, petrol and diesel prices surged by 29 paise and 30 paise respectively to Rs 90.22 and Rs 82.13

Petrol prices breached the Rs 87-a-litre mark to touch an all-time high of Rs 87.30 in the national capital.

Petrol and diesel prices were hiked by 35 paise per litre each on Tuesday, according to a price notification from oil marketing companies. The diesel prices stood at Rs 77.48. 

Fuel prices, which vary from state to state depending on local sales tax or VAT, are now at a record high in the country, prompting calls for a cut in excise duty to ease the burden on consumers. Petrol and diesel prices are revised on a daily basis in line with benchmark international price and foreign exchange rates. 

Petrol prices in Mumbai stood at Rs 93.83 on Tuesday as compared with Rs 93.49 yesterday. One litre of diesel will cost Rs 84.36 in the city. In Chennai, petrol inched up 31 paise to sell at Rs 89.70. Diesel was retailing at Rs 82.66 in the city. 

In Bangalore, petrol and diesel prices surged by 29 paise and 30 paise respectively to Rs 90.22 and Rs 82.13. In Kolkata, the retail price of petrol price was increased by 33 paise to Rs 88.63 per litre.

Fuel prices have been witnessing an upswing since the past month, leading to demands for a cut in excise duty. Earlier, Petroleum Minister Dharmendra Pradhan had said that the fuel prices had gone up because of a lower production in oil-producing nations in the wake of the coronavirus pandemic. Organization of the Petroleum Exporting Countries in a meeting on February 3 decided to go on with the output curbs. 

However, on Monday, Saudi Arabia decided against raising crude supplies for March delivery to Asian consumers, including India, while raising the prices for other major consumers in the US and Europe.

What this means is that even though crude prices may rise higher from the present levels of $60 a barrel, India along with other Asian consumers would continue to get discounts over the prevailing price. 

This came at an opportune time for India, where fuel prices have been inching towards historic highs.

On Sunday, the Meghalaya government decided to reduce the tax on petrol and diesel in the state by Rs 2 per litre from Monday midnight, Chief Minister Conrad K Sangma said.

"In view of the recent price hike in petrol and diesel in #Meghalaya, Govt. has decided that the rate for both petrol and diesel will be reduced by 2 rupees per litre, effective from midnight of 8th February 2021," the chief minister had tweeted.

The state government's decision to reduce rates came days after local taxi operators in the state capital protested against the high taxes in petrol in the state. The price of petrol is little over Rs 90 per litre in the state capital.

Last week, Pradhan told the Rajya Sabha in a written reply to a question that excise duty levied by the central government makes up for Rs 32.98 per litre of the price of petrol in Delhi and sales tax or VAT of the state government constitutes Rs 19.55.

For diesel, the central excise adds up to Rs 31.83 and VAT to Rs 10.99, he had said.

Besides, the price includes a dealer commission of a minimum Rs 2.6 per litre on petrol and Rs 2 on diesel.

Retail petrol rates have risen by Rs 17.71 per litre since mid-March 2020 after the government raised taxes by a record margin to mop up gains arising from fall in international oil prices. Diesel rates have gone up by Rs 15.19.