Petrol nears INR 80 mark, diesel at new high after 16th price hike in a row

New Delhi, June 22 (PTI): Petrol price on Monday was hiked by 33 paise per litre and diesel by 58 paise to take retail rates to record high as the oil companies increased prices for the 16th day in a row.

In 16 days, petrol price has been hiked by INR 8.3 per litre and diesel by INR 9.46 - a record increase in rates of the fuel in any fortnight since pricing was deregulated in April 2002.

Petrol price in Delhi was hiked to INR 79.56 per litre from INR 79.23 while diesel rates were increased to INR 78.55 a litre from INR 78.27, according to a price notification of state oil marketing companies.

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.

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

The 16th daily increase in rates, since oil companies on June 7 restarted revising prices in line with costs after ending an 82-day hiatus in rate revision, has taken diesel prices to fresh highs. Petrol price too is at a two-year high.

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

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

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

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

Over 63 per cent of the retail selling price of diesel is taxes. Out of the total tax incidence of INR 49.43 per litre, INR 31.83 is by way of central excise and INR 17.60 is VAT.

In Mumbai, petrol price has gone up from INR INR 86.04 per litre to INR 86.36 on Monday. Diesel rates have increased to INR 77.24 a litre from INR 76.69 a litre, according to the price notification.

The 82-day freeze in rates this year was imposed in mid-March soon after the government hiked excise duty on petrol and diesel to shore up additional finances.