Diesel Prices On All-Time High; Petrol Prices Also On The Rise

The fuel prices in major cities are again on the rise, with the diesel prices rising to fresh record levels and petrol crossing the Rs. 78-per-litre mark in the national capital. The Oil Marketing Companies (OMCs), have hiked the prices today for a fourth straight day. The surge in fuel prices is largely due to rise in the cost of crude oil and high excise duty levied on transportation fuel in the country. The Brent crude oil is currently priced around $76.68 per barrel.

Also Read: No GST On Petrol, Diesel In Near Future As Centre, States Not In Favour

In Delhi, the price of diesel is priced at Rs. 69.75 per litre, Mumbai retails is Rs. 74.05 per litre and Kolkata sells diesel for Rs. 72.60 per litre while Chennai retails it at Rs. 73.69 per litre, according to daily price notification issued by state-owned oil firms. The hike in rates of diesel is significant as it is mostly used in transportation of food and agricultural products and an increase in its price may lead to higher inflation.

As far as the prices of petrol are concerned, Delhi sells it for Rs. 78.18 per litre, while Mumbai is retailing at Rs. 85.60 per litre. Petrol is priced at Rs. 81.11 per litre in Kolkata and Rs. 81.22 per litre in Chennai. The revised rates are applicable from 6 am on August 29, 2018.

Also Read: Bringing Petrol And Diesel Under GST Is Impractical, Says NITI Aayog Vice Chairman

Last week, it was reported that petrol and diesel will not come under the purview of Goods and Services Tax (GST) in the immediate future as neither the Central government nor any of the states is in favor on fears of heavy revenue loss. When the one-nation-one-tax regime of GST was implemented in July last year, five petro-products - petrol, diesel, crude oil, natural gas, and aviation turbine fuel (ATF) were kept out of its purview for the time being.

The Union finance ministry has not mooted any proposal to bring petrol and diesel or even natural gas under GST but took up the issue at the last GST Council meeting on August 4 based on media reports. If the two fuels are put under GST, the Centre will have to let go Rs. 20,000 crore input tax credit it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the GST regime. States, on the other hand, want to keep a revenue tool in their hand to meet any contingency like the floods in Kerala.

Also Read: Fuel Prices Set To Increase Every Day Again, Diesel Price Reaches Record High

The Centre currently levies a total of Rs. 19.48 per litre of excise duty on petrol and Rs. 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel. The total tax incidence on petrol comes to 45-50 per cent and diesel comes to 35-40 per cent.