Govt backs daily fuel price revision

Govt backs daily fuel price revision

Govt backs daily fuel price revision

At present, a consumer pays additional excise duty of Rs 11.77 on every litre of petrol and Rs 13.57 a litre on diesel.

India relies on imports to meet 80% of its needs and so domestic fuel rates have been aligned to the movement of equivalent product prices in the worldwide market since April 2002.

Petrol price in Mumbai rose to its highest since August 2014 while diesel prices reached their peak since August 2014 in Kolkata and Chennai.

Petroleum product's prices have soared recently and the Oil Minister Dharmendra Pradhan on Wednesday suggested ways to check it as many state governments have significantly increased value-added tax on the fuel.

The dynamic fuel pricing mechanism is the best option in the interest of the consumers over the long term, Dharmendra Pradhan said after a meeting with the oil marketing companies' executives. "Petrol and diesel prices in the country are benchmarked to the global price of these commodities", Pradhan said speaking to journalists after a meeting in New Delhi to review the daily petrol and diesel pricing regime.

The two hurricanes to have hit the American shores in succession have hit the global refining capacity by as much as 13%, leading to a rise in the retail fuel prices in the worldwide markets, Dharmendra Pradhan said.

Though global crude and product prices have been rising for some time, the recent spike has been stoked mainly by fears of product shortage in the wake of hurricanes Harvey and Irma knocking out 13% of United States refining capacity.

Petrol and diesel prices have risen to their highest in three years in some cities in the country, following a sharp rise in global rates driven by the hurricane-induced shutdown of refining capacity in the US. Petrol price in Delhi on Tuesday was at Rs 70.38 per litre, whereas in Mumbai a litre of petrol costs Rs 79.48.

This netted the government Rs 37,789.26 crore from petrol and Rs 1,22,956.80 crore from diesel in additional excise duty during the period between April 1, 2016 and March 31, 2017.

He, however, remained non-committal on cutting taxes to soften the blow of the relentless rise in prices since the government need to finance huge infrastructure and social projects has to be balanced with consumer needs. "We have to fund massive highways and road development plans, railway modernisation and expansion, rural sanitation, drinking water, primary healthcare and education".

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