Petrol and diesel prices were hiked on Monday for the sixteenth straight day, seeing a hike of 33 paise per litre and 59 paise per litre respectively. The cumulative increase in the prices for the 16 days for petrol stands at ₹ 9.21/litre and ₹ 8.55/litre for diesel. Customers in Delhi will now have to pay ₹ 79.56 per litre instead of ₹ 79.23 for petrol. However, they will have to shell out ₹ 78.85 a litre for diesel. The new prices were updated as per the notification of state oil marketing companies. Notably, the new prices are effective across the country and it varies from state to state in accordance with the local sales tax or value-added tax.
Petrol & diesel prices were hiked by 33 paise a litre & 58 paise a litre
In Mumbai, petrol retails at ₹ 86.36 per litre whereas diesel costs ₹ 77.24 per litre. The two petroleum products in Kolkata retail at ₹ 81.27 and ₹ 77.14 respectively. The 16-day increase in petrol and diesel prices is the result of oil companies' decision to revise the prices daily which are we on hold for 82 days during the lockdown. The oil companies started revising the prices daily from June 7, 2020. This has seen prices of diesel and petrol soar to all-new highs and in fact a two-year high.
Taxes make up for nearly two-thirds of the retail selling price. About ₹ 50.69 per litre, or 64%, in the petrol price, is subject to taxes ₹ 32.98 is the central excise duty and ₹ 17.71 is local sales tax or VAT. For diesel, over 63% of the retail selling price is taxes. Out of the total tax incidence of ₹ 49.43 per litre, ₹ 31.83 is by way of central excise while ₹ 17.60 is subject to VAT.
The government hiked excise duty on petrol and diesel by Rs 3 per litre each in March and it was again hiked in May by a record ₹ 10 per litre and ₹ 13 for petrol and diesel respectively. These two hikes gave the government ₹ 2 lakh crore in additional tax revenues. The state-owned oil companies such as Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd. and Hindustan Petroleum Corporation Ltd., adjusted the petroleum prices against the fall in the retail rates, instead of passing on the excise duty hikes to customers.