Petrol and diesel prices in India reached a new record high after the 11th consecutive price hike by oil companies. In Mumbai, the price of petrol increased by 26 paise to Rs.85.29 per litre on Thursday. The increase in fuel prices, which has created a major political storm in India, has been attributed to the disruptions caused in the global market.
In Mumbai, diesel price increased by 16 paise on the 11th consecutive day and it is currently being sold at Rs.72.96 per litre. In Delhi, petrol price increased by 26 paise to Rs.77.47 per litre whereas diesel price increase 15 paise to Rs.68.53 per litre.
In the global market, Brent Crude Oil is currently trading at a price of $79.5 per barrel. Various factors such as the decision of OPEC nations to reduce output, political instability in Venezuela, new US sanctions on Iran, etc. are said to have influenced the price of crude in the global markets.
OPEC nations decided to lower their oil output following the price crash witnessed in the global markets a few years ago. With the supply from Venezuela and Iran expected to dwindle in the near future, it is expected that OPEC nations will start increasing their oil output by as early as June.
Following the record increase in fuel prices, Union Minister for Petroleum Dharmendra Pradhan stated that the government is likely to intervene in order to bring the price under control. Union Minister Nitin Gadkari stated that any reduction in fuel prices will affect the funds allocated for various social welfare schemes.
The cost of fuel in metro cities varies based on the sales tax or VAT levied by the state governments. Over the last 10 days, petrol price has witnessed an increase of Rs.2.50 per litre. The central government currently levies an excise duty of Rs.19.48 per litre. Between 2014 and 2017, the government has raised the excise duty nine times and reduced it only once.