Fuel prices across the country rose to the highest level in 55 months as global benchmark Brent crude climbed to $74.74 a barrel, the highest since November 27, 2014—the day when Opec started a price war and sent oil prices tumbling to $30 a year later.
In Mumbai, which has one of the highest state taxes on fuels, petrol price rose to Rs.81.92 a litre, the highest since September 14, 2013, when it was being sold for Rs.83.62. Diesel price rose to Rs.69.50 a litre, the highest since August 31, 2014, when it cost Rs.67.27 per litre.
In Delhi, considered the benchmark sample market, diesel price rose to all-time high of Rs.65.27 a litre. Petrol price shot up to Rs.74.07 a litre, the highest since Rs.73.93 on April 14. Petrol had crossed the Rs.70-mark for the first time in the capital on July 1, 2013, when the price was raised to Rs.73.60 a litre from Rs.71.56.
Since June 16, state-run fuel retailers began revising fuel prices daily, dumping the old practice of doing so every fortnight. In the old system, the impact of rise in global prices was delayed and momentary spikes often evened out under the law of averages. But in the present system, the impact is felt immediately. But price movement is uneven across the country due to different rates at which state governments tax petrol and diesel. The increase, however, in nearly all states marks a new high in more than a year.
The government had cumulatively hiked excise on petrol by Rs.11.77 per litre and on diesel by Rs.13.47 a litre between November 2014 and January 2016 to soak up part of the benefit of tumbling global oil prices. So, if oil prices continue to rise, consumers will want more tax cuts.
Consumers have been steadily paying more since August 2017 as global oil prices began hardening.
Till October 3, 2017, when growing public anger against high taxes forced the government to cut excise duty on fuels by Rs.2 a litre, petrol price had jumped by Rs.7.80 per litre and diesel by Rs.5.70 to hit an all-time high at that point in Delhi.
With global oil prices expected to rise further in the coming days, clamour for excise cut is going to get louder. How long the Centre can maintain its poise amid rising public anger, especially ahead of the Karnataka polls, is anybody’s guess.