Petrol prices will hit a new high this morning as they rise to their most expensive since April 2015.
Media reports said state-owned oil marketing companies are said to have lost about Rs 500 crore as they absorbed higher cost resulting from the increase in rates in global oil prices and fall in rupee against the U.S. dollar.
This development, which coincided with the run-up to the Karnataka assembly elections, has brought to the fore an evergreen debate: does the government continue to interfere in the pricing of petrol and diesel despite deregulation? The retailers had last raised petrol and diesel prices on April 24 by 13 and 18 paise, respectively, in Delhi when the Indian basket - mix of crude bought by Indian refiners - averaged $69/barrel. Earlier, government oil companies used to review oil prices twice a month.
Petroleum prices now vary across Kenya due to transport costs that reflect how far a location is from Mombasa Port where imported consignments land and are stored. But what he didn't tell was that why they have higher prices.
The benchmark worldwide diesel rates have since climbed from $84.68 per barrel to $88.63. The weakening rupee has dropped to 67 to a dollar from 66.62 in the last few days. Fuel prices in India were highest in 2014, when worldwide crude oil clocked a peak level of $100 per dollar. However, none of the companies had officially confirmed that the absorption was due to the elections in Karnataka. Prices have more or less mirrored global rates since then. Ltd (HPCL)-introduced dynamic fuel pricing in June, joining countries such as the U.S. and Australia, where fuel prices change daily depending on global oil price fluctuations.
The ministry has, however, denied that it has asked OMCs to go slow on the price hike.
Earlier in December when Gujarat voted, retail prices of Petrol were virtually held static by daily slashing of 1-3 paise for nearly 14 days before polls. In Delhi too, diesel price crossed Rs 64 per liter, which is the highest ever recorded price of diesel in Delhi.
Former Congress Lok Sabha member PC Chacko demanded the government should withdraw the excise duty on fuel and roll back the fuel price hike. This led to its excise mop up more than doubling to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.