Kochi/New Delhi: With fresh hikes in fuel prices on Sunday, the petrol price in Kerala has crossed the Rs 110-mark. Petrol price was hiked by 35 paise and diesel by 37 paise on Sunday.
At Parashala in Thiruvananthapuram, the petrol now costs Rs 110.10 per litre and diesel priced at Rs 103.77 per litre.
This is the fifth consecutive day of the price hike. There was no change in rates on October 18 and 19, prior to which prices were hiked by 35 paise per litre each on four straight days.
Petrol price has been hiked on 21 occasions since September 28, when a three-week-long hiatus in rate revision ended. In all, prices have gone up by Rs 6.4 a litre. Diesel rates have been increased by Rs 7.70 per litre in 24 hikes since September 24.
Crude oil prices in the international market continue to be at their highest level since 2018. Crude oil traded at $84.97 a barrel on Saturday.
According to reports, the current crisis is due to the unwillingness of OPEC countries to increase production in line with rising fuel consumption and demand.
The latest increase that follows the unrelenting hike in international oil prices has pushed pump rates across the country to their highest-ever levels. While petrol is above Rs 100-a-litre-mark in all major cities, diesel has crossed that level in more than a dozen states.
Prices differ from state to state, depending on the incidence of local taxes.
The petrol prices increased to Rs 107.59 per litre in the national capital while the price of diesel was raised by the same amount to Rs 96.32 per litre.
In Mumbai, petrol and diesel prices per litre stand at Rs 113.46 and Rs 104.38 respectively. As for Kolkata and Chennai, petrol and diesel cost Rs 108.11 and Rs 99.43 respectively in Kolkata and Rs 104.52 and Rs 100.59 respectively in Chennai. In Bengaluru, petrol is available at Rs 111.34 per litre and diesel at Rs 102.23 and in Hyderabad, one litre of petrol is now available at Rs 111.91 and diesel cost Rs 105.08 for one litre of diesel.
The costliest fuel was in the border town of Ganganagar in Rajasthan, where petrol comes for Rs 119.79 a litre and diesel for Rs 110.63 per litre.
Petrol price up Rs 36.33 a litre, diesel 26.93 in less than 18 months
The total increase in petrol price since May 5, 2020 decision of the government to raise excise duty to record levels now totals Rs 36.33 per litre. Diesel rates have during this period gone up by Rs 26.93 per litre.
The government had raised excise duty on petrol and diesel to mop up gains that would have otherwise accrued to consumers from international oil prices crashing to as low as $19 per barrel. While international prices have since recovered to $85, excise duty has remained at Rs 32.9 per litre on petrol and Rs 31.8 on diesel.
The increase in fuel prices has stoked concerns over inflation as diesel is the mainstay fuel used for transporting goods, including agri commodities.
Opposition parties including Congress have been critical of the government over the price hikes and have demanded a reduction in taxes.
Centre adamant on cutting fuel taxes
Oil Minister Hardeep Singh Puri on Friday equated demand for cutting excise duty to 'axing one's own feet', saying such levies funded government schemes to provide free COVID-19 vaccines, meals and cooking gas to millions amid the pandemic.
"I think this simplistic political narrative we get in India (that), 'prices have gone up, why don't you reduce your taxes'... so every time price goes up due to something else, it says you axe your own feet in the process," he had said late on Friday.
He was asked a question on whether the government would cut taxes, which make up for 54 per cent of the price of petrol and over 48 per cent of diesel, to ease the burden on consumers.
"Yesterday (on October 21) we completed vaccinating one billion (against COVID), we fed 90 crore people for one full year (during the pandemic) providing 3 meals in a day, we did Ujjwala scheme (of providing free cooking gas LPG refill to 8 crore poor beneficiaries). All this and much more with that Rs 32 a litre excise duty (levied by the central government)," he had asserted. "The money collected from tax also goes into building roads, constructing houses for the poor and other social welfare schemes."
"I am not the finance minister therefore it is not an appropriate answer for me to give," he said on demands for cutting taxes. "That Rs 32 a litre that we collect provides us the ability to provide all these welfare services, including 1 billion vaccines."
Puri had said that while the centre levies specific excise duty on petrol and diesel, which does not change if the oil prices fall to $19 per barrel or rise to $84, state governments levy ad valorem rate of VAT whose incidence goes up with every hike.
He said petrol price was decontrolled in 2010, effectively making it linked to world markets.
Diesel prices were freed from government controls in October 2014 by the Modi government.
Kerala High Court, he said, had suggested that the inclusion of petrol and diesel in the Goods and Services Tax (GST) regime be put before the GST Council.
And when the Council considered it at its meeting in Lucknow last month, "the state governments thought otherwise," he said, referring to the panel's decision not to include petrol and diesel in the GST regime which would have meant subsuming central excise and state VAT into one uniform tax.
Finance Minister Nirmala Sitharaman had after the GST Council meeting stated the panel had unanimously decided to continue to keep petrol and diesel out of the GST regime.
The Council is headed by the Union finance minister and comprises representatives of states and UTs.
Blame on Congress-led UPA government
Puri had also referred to the Rs 1.34 lakh crore oil bonds the previous Congress-led UPA government had issued.
Though he did not link them to the current fuel prices, the bonds are among the factors that BJP leaders have been blaming for the rise in fuel prices.
Petrol and diesel as well as cooking gas and kerosene were sold at subsidised rates during the previous Congress-led UPA government.
Instead of paying for the subsidy to bring parity between the artificially suppressed retail selling prices and the cost that had soared because of international rates crossing $100 per barrel, the then government issued oil bonds totalling Rs 1.34 lakh crore to the state-owned fuel retailers.
These oil bonds and the interest thereon are being paid now.
Of the Rs 1.34 lakh crore of oil bonds, only Rs 3,500 crore of principal has been paid and the remaining Rs 1.3 lakh crore is due for repayment between this fiscal and 2025-26, according to the finance ministry.
The government has to repay Rs 10,000 crore this fiscal year (2021-22). Another Rs 31,150 crore is due to be repaid in 2023-24, Rs 52,860.17 crore in the following year and Rs 36,913 crore in 2025-26.
However, the collections from the hike in excise duty far exceed the amount due to be paid to oil companies.
Minister of State for Petroleum and Natural Gas Rameswar Teli in July told Parliament that the Union government's tax collections on petrol and diesel jumped by 88 per cent to Rs 3.35 lakh crore in the year to March 31 from Rs 1.78 lakh crore a year back.
Excise collection in pre-pandemic 2018-19 stood at Rs 2.13 lakh crore.
(With PTI inputs)