Published: Tue, September 04, 2018
Money | By Hannah Jacobs

Petrol, diesel prices hit fresh high, go up for 10th consecutive day

Petrol, diesel prices hit fresh high, go up for 10th consecutive day

Diesel rates on Monday were hiked by 39 paise a litre, the steepest increase since the daily revision in prices was introduced in mid-june 2017.

Petrol price in Delhi breached Rs 79 per litre mark on Monday, hitting a fresh high. Current account deficit (CAD) is already widening and an excise duty cut will disturb fiscal deficit (target).

Petrol and diesel prices in the country touched their highest levels Monday mainly due to fall in rupee and a sharp rise in crude oil rates. According to a price notification of state-owned fuel retailers, petrol price was on Tuesday hiked by 16 paise per litre and diesel by 19 paise.

The rupee on Tuesday slumped to 16 paise against the dollar to trade at a lifetime low of 71.37 on strong demand for the USA currency. Brent crude oil is now priced over $78 per barrel. Apart from crude oil prices in the worldwide market and the weakening rupee, one of the factors affecting fuel prices is the high value added tax (VAT) in the state of Maharashtra.

In its statement the department of energy said it was aware that the sustained price increases of the past few months had put consumers under pressure, and had chose to intervene temporarily for this month - but that it was a "once off temporary intervention" to provide some relief against fuel price hikes. "Secondly, global currencies have weakened against the U.S. dollar", Pradhan had said in Surat. "Public is unhappy with the rising fuel prices".

"The government can not disturb fiscal maths by cutting excise duty", he said.

External factors: The exchange rate - that is the price of the dollar vs the rand. 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. "We can not reduce defence expenditure or interest payments if we decide to cut excise of petrol and diesel", the official explained.

Petrol prices have hit an all-time high in Mumbai.

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