Petrol, diesel prices start buzzing soon after Karnataka elections

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The Automobile Association (AA) said last month's fuel price account was closed earlier by the Department of Energy, resulting in the postponement of a substantial 50 cent-per-litre increase brought on by a weakening rand and rising global oil prices at the end of April. Similarly, in Delhi the petrol price touched Rs 74.80 a litre, while diesel prices stood at Rs 66.14. According to experts the three oil marketing companies - Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd- together suffered losses of around Rs 1,500-1,700 crore due to the steep rise in prices.

Petrol and diesel prices had been hiked again for a second day in a row.

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As per IOCL's website, the price of petrol was at Rs 75.10 in Delhi, Rs 77.79 in Kolkata, Rs 82.94 in Mumbai, Rs 77.93 in Chennai and Rs 76.31 in Bengaluru.

The Congress leader P Chidambaram tweeted on Monday that the recent "interval" has coincided with Karnataka elections. State-owned oil companies in June last year dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision, following which fuel prices are revised at 6 am every day.

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The BJP-led government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then also cut the tax once in October a year ago by Rs 2 a litre.

According to the price build-up data for fuels provided by International Olympic Committee, 42 per cent of the total diesel price charged to consumers comprises taxes while the tax component stands at 52 per cent for petrol. Diesel, on the other hand, has already retailing at its highest-ever price in India. Kuku Marwaha, President of Nagpur Truckers Unity, said that the transporters were bearing the brunt of high fuel prices.

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Rising crude oil, coupled with Indian government ruling out excise duty cuts and various states' being reluctant in reducing the Value-Added Tax on fuel prices, has left limited room for OMC to make any relaxation in the price of the product, especially diesel, which is now at a record high. The centre had cut excise duty on petrol and diesel by Rs 2 per litre in October last year for the first time in four years.