13 September, 2017
Not long ago, petrol and diesel price hikes used to trigger protests by opposition parties as well as common people.
Petrol prices in the country have touched their highest levels since 2014, official data has showed.
The petrol prices were hiked yesterday by 7-8 paise per litre and diesel rate increased by 10-11 paise per litre in the four major cities, as part of the daily revision exercise, as a result of which the fuel rates are at an all-time high since August 2014.
Similarly, petrol per litre cost Rs 70.38 in Delhi, Rs 73.12 in Kolkata and Rs 72.95 in Chennai while diesel price was Rs 58.72 in Delhi, Rs 61.37 in Kolkata, Rs 62.37 in Mumbai and Rs 61.84 in Chennai.
"GST is the only way to have a rational price mechanism for petroleum products.the industry has been demanding it and finance minister Arun Jaitley (who heads the GST Council) is very interested to have it", Pradhan said, pointing to the substantial difference in prices between Delhi and Mumbai, for instance, on account of local taxes.
State-owned oil companies in June dumped the 15-year-old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost.
He said dynamic pricing ensures that the benefit of even the smallest change in worldwide oil prices can be passed down the line to the dealers and the end-users.
Immediate price cuts followed.
Union Petroleum Minister Dharmendra Pradhan on Wednesday evening rejected a suggestion that oil marketing companies should absorb any further rise in crude prices in a big relief to the domestic refiners, hours after their stocks took a tumble in trading. Then, it started rising, beginning with a humble 1 paisa per litre hike on June 28-29 - an amount not worth batting an eyelid.
"Daily revision in prices is good". While the price of crude oil, the main raw material from which petrol is extracted, is down by as much as 60% in the last nine years, the retail price of petrol has risen by about 45% during the same period.
As FE Online wrote earlier, crude oil price is not the only factor affecting the retail fuel prices. Read here what all goes into pricing the increase or decrease in the petrol and diesel prices.