On 2nd April 2018, petrol and diesel prices in India have hit a record high in India. In New Delhi, petrol price has touched Rs 73.83 per litre; the highest in the last four years. On the other hand, diesel prices have hit a new record at Rs 64.69 per litre in the National Capital.
The petrol and diesel prices in various states are even higher than that in New Delhi and the other union territories. To know the current petrol and diesel prices in various parts of India, check out the links below:
So why do you think fuel prices in India are this high? We always hear about rising fuel prices in India, but never about petrol and diesel prices getting low. The government has raised the fuel prices in India, nine times between November 2014 and January 2016.
It was only in October 2017, when the Indian government reduced the central excise duty on fuels by Rs 2. India also has the highest fuel pricing among South Asian countries.
Why Petrol And Diesel Fuel Prices Are High In India
Globally, the price of crude oil contributes to a good proportion of the final fuel price. Crude oil price is currently $70 per barrel (roughly Rs 4553). However, in India, a good share of the petrol and diesel price go to the government as taxes: Excise duty to the Centre and Value Added Tax (VAT) to the states.
In this context, the increase in excise duty (Rs 11.77 per litre for petrol and Rs 13.47 for diesel) between 2014 and 2016, has helped the government increase the revenue by a good margin. The revenue shot up to almost Rs 2,42,000 crore in 2016-17, compared to Rs 99,000 in 2014-15.
Speaking about the hike, Minister for Petroleum and Natural gas, Dharmendra Pradhan told the media, not to criticise the government for the rise in fuel prices, but to focus on the good works done. He also added that other governments have done worse. In addition to this, he claimed that international markets were to be blamed for increased fuel prices in India. The government, according to him, has reduced the excise duty on fuel to keep the prices in check.
As per reports, the government gets Rs 10 per litre more excise duty on petrol than it used to get in 2014. Similarly, for diesel, it is Rs 11 per litre more. In total, excise duties on petrol and diesel have gone up by 105.49 and 240 percent, respectively.
State governments have also increased the VAT on fuel. The rate of the VAT is up by Rs 3.74 per litre for petrol and Rs 3.40 per litre for diesel; a good 31 and 44 percent respective hike.
Thoughts On Why Petrol And Diesel Prices Are High In India
Though there are many bold statements made by the majority as to why fuel prices in India have soared, the most basic explanation one could give is the increase in taxation. But, does the petroleum industry require this much taxation? We cannot actually comment. However, there were times when India had lesser fuel prices than today, even when global crude oil prices were much higher than what it is now.
Why do you think petrol and diesel prices in India are high?