The Congress is yet to form a government at the Centre but it faces the prospect of being credited with a highly unpopular decision of a one-rupee per litre hike in petrol and diesel prices.
National Democratic Alliance on Saturday lambasted the United progressive Alliance government for its decision to hike diesel prices every month and said a meeting of alliance partners would be convened to chalk out a strategy to be adopted during the upcoming Budget Session of Parliament on price rise.
Petroleum Minister Murli Deora has announced that the cabinet will soon take a decision on fuel price hike.
'We will have multiple engine options -- electric vehicle and internal combustion engine in diesel and petrol.'
'While intensification of fuel prices and broad-based domestic cost pass-through pressures is a downside risk, core inflation is expected to strengthen further as demand recovers to pre-Covid levels,' the ministry said on Friday.
The Cabinet Committee on Economic Affairs did not take up the issue of hike in petroleum prices on Thursday, Commerce Minister Kamal Nath said.
This increase excludes local levies. The actual hike after considering VAT would be Rs 2.84 per litre in Delhi for petrol and Rs 2.11 for diesel.
It will soon be two years since petrol was decontrolled, but few will happily celebrate this second birthday.
The government on Wednesday broadly hinted about a hike in petrol and diesel prices, saying although it has kept retail prices unchanged it cannot do so for long given the rise in crude oil rates.
The Prime Minister-appointed B K Chaturvedi panel is believed to have suggested raising fuel prices every month to bring them at par with production cost and has sought imposition of a 'Super Profit Tax' on oil fields awarded before 1999.
Petrol prices in Delhi rose by Rs 4 a litre, while diesel rates rose by Rs 2 a litre, Oil Minister Murli Deora told reporters after a meeting with Prime Minister Manmohan Singh in New Delhi.
"For 2010-11 and beyond, the Kirit Parikh report will be the benchmark. The report is being studied.These decisions are politically sensitive issues and have to be sustained over a period of time," Petroleum Secretary S Sundareshan told Business Standard. "It is impossible to insulate the Indian consumer against the movement in international oil prices."
The Planning Commission on Tuesday called for linking petrol and diesel prices with international markets and made a case for raising gas prices by public sector companies.
Petrol prices were on Wednesday hiked by Rs 3.07.
The three government oil marketing companies, Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, are losing Rs 320 crore a day as they sell at subsidised rates.
The government is likely to give public sector oil firms limited autonomy to fix petrol and diesel prices within a narrow price band once international markets stablise, Oil Minister Mani Shankar Aiyar said on Monday.
The oil companies will meet on Friday for the review meeting on pricing in which petrol price could be increased by Re 1 and diesel prices by 50 paise by this weekend.
Oil Minister Murli Deora has said that petrol and diesel prices would not be cut till crude oil prices fell to $67 a barrel, since the depreciation in the rupee against the US dollar had eroded gains from falling oil prices, which touched a 7-month low.
The dollar devaluation has seen revenue loss incurred by state-run oil firms on fuel sales trimming to about Rs 96 crore per day.
Petrol and diesel prices on Wednesday were hiked by 25 paise per litre each, the third increase this week, propelling petrol price to cross Rs 100 per litre mark in more cities including Bhopal and Indore. Petrol and diesel prices are now at record high across the country, price notification of state-owned fuel retailers showed. In Delhi, petrol now comes for Rs 92.05 per litre and diesel is priced at Rs 82.61. This was the third increase in prices this week and seventh hike since May 4 when the state-owned oil firms ended an 18-hiatus in rate revision they observed during assembly elections in states like West Bengal.
promises a mileage of 24.2 kmpl.
Quibbling between the Centre and the states on who should provide more relief to consumers on fuel prices intensified with the latter asking the Union Government to give an account of accruals to it from the latest hike in petrol and diesel prices.
Several members had moved adjournment motions to raise the issue, but Speaker Meira Kumar said she has not accepted the demand.
The government on Monday ruled out any immediate increase in petrol and diesel prices despite a spurt in international crude oil prices.
Petrol and diesel prices are unlikely to be hiked in the near future, with Finance Minister P Chidambaram agreeing in-principle to share a third of the revenue loss that state-run oil firms incur on sale of fuel
Projecting a moderation in inflation despite the hike in petrol and diesel prices, the Economic Survey on Thursday cautioned against the pressures from rising foreign funds and global commodity price movement.
Petrol price cut by Rs 1.15 per litre while diesel rate hiked by Rs 0.50 a litre with effect from midnight on Thursday.
The drop in international oil prices has resulted in revenue loss of Indian Oil, Bharat Petroleum and Hindustan Petroleum dip to Rs 400 crore per day from Rs 450 crore (Rs 4.5 billion) a fortnight back. The basket of crude oil India buys averaged $111.09 a barrel in the second fortnight of August as compared with $117.37 per barrel in the first fortnight of the month.
The EGoM was originally scheduled to meet on Wednesday but has been deferred because of non-availability of certain ministers in the grouping.
Petrol and diesel prices may be hiked by up to Re 1 per litre each on August 15, the next due date for fuel price revision, in step with the surge in global oil prices.
Dealers say there's been a 20-25 per cent drop in demand.
Diesel prices have cumulatively risen by Rs 10.68 a litre in 17 instalments since January 2013 when the United Progressive Alliance government had decided on the monthly hikes.
Amid record-high fuel prices, Finance Minister Nirmala Sitharaman on Monday said there is no proposal as of now to bring crude oil, petrol, diesel, jet fuel (ATF) and natural gas under the Goods and Services Tax (GST). When the GST was introduced on July 1, 2017, amalgamating over a dozen central and state levies, five commodities - crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) - were kept out of its purview given the revenue dependence of the central and state governments on this sector. This meant that the central government continued to levy excise duty on them while state governments charged VAT. These taxes, with excise duty, in particular, have been raised periodically.
Petrol and diesel sales in the country fell in July over the previous month as the onset of monsoon chipped away demand in some sectors and restricted mobility, preliminary industry data showed. Diesel, the most widely used fuel in the country, saw consumption drop 13.1 per cent to 6.44 million tonnes from 7.39 million tonnes of demand in June. The arrival and intensity of monsoon weigh heavily on diesel demand in the country and consumption traditionally is lower in July-September than in April-June.
The rising rupee over the last three months has brought cheer to the oil marketing companies, who have together added around Rs 250-300 crore (Rs 2.5-3 billion) to their operating profits already.
A strong demand for diesel SUVs has bumped up the contribution of these variants to Hyundai Motor India's sales to a three-year high, a company top official told Business Standard. The local arm of the South Korean carmaker has benefitted after some leading manufacturers - including car market leader Maruti Suzuki - pulled the plug on diesel models amid tightening regulations. Hyundai has also gained from the changing travel preference -people are frequenting getaways and taking to the road a lot more than what they did before the pandemic. This trend has been fuelling overall SUV sales.
In 12 hikes, petrol price has gone up by Rs 6.55 per litre and diesel by Rs 7.04 a litre.
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