Petrol price hiked 16 paise per litre, diesel by 14 paise

Daniel Fowler
June 25, 2020

Why were prices frozen and why are they rising now?

The Congress has been attacking the BJP-led NDA government for increasing the petrol and diesel prices everyday for the past 18 days after the lockdown restrictions were relaxed. The freeze in rates was imposed in mid-March soon after the government hiked excise duty on petrol and diesel to shore up additional finances.

However, diesel is costlier than petrol only in Delhi among the four metros.

Diesel is also the preferred fuel of choice for motorists who tend to drive a lot, with its previously lower price and the better mileage of diesel cars making it a cheaper option.

Maharashtra, Delhi, Tamil Nadu report highest active COVID-19 cases
Of these, 2,07,871 samples were tested on Wednesday. 1,888 people have recovered, and there have been 22 deaths. Apart from Bangalore, coronavirus cases continue to rise in major cities like Delhi, Chennai, and Mumbai.

Petrol price however remained unchanged for the first time since June 7 even as diesel prices maintained its upward trend touching new highs.

This is largely due to an increase in both state and central government taxes.

Notably, the price of petrol has hiked by Rs 9.41 per litre and diesel prices have increased by Rs 9.58 per litre since the country's key oil companies (OMCs) resumed daily revision of rates under the first phase of "Unlock". Meanwhile, petrol is priced at Rs 81.45 per litre and diesel costs Rs 75.06 in Kolkata. This is after oil-marketing companies froze prices for nearly 83 days during the lockdown. Since the levy is ad valorem, the actual incidence has gone up every single time oil companies raised retail selling price in the last 18 day.

Representatives of Indian Oil Corporation, the largest OMC in the country, said they had chose to stop revising prices in line with global prices of petrol and diesel as following those guidelines during the historic fall in the prices of crude in late March and April would have lead to negative margins for the OMCs which they considered "not sustainable". "Then there are transportation costs, marketing and dealer margins, excise duty, and VAT", added Singh. 14,476 deaths have been recorded due to the infection so far in the country.

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