Crude dipped below $40, high taxes on fuels by governments

New Delhi: Though the crude prices have dipped below $40 per barrel, the consumers are yet to bear the hefty taxes hiked by the Centre and State governments in the country.

Jet fuel or ATF price on Tuesday was hiked by 16.3 per cent while petrol price was increased by 47 paise per litre and that of diesel by a record 93 paise on the back of firming international oil rates.

Aviation turbine fuel (ATF) price was hiked by 16.3 per cent in the national capital, according to a price notification by state-owned oil marketing companies.

This is the second straight increase in ATF price this month. Rates were hiked by a record 56.5 per cent (Rs 12,126.75 per kl) on June 1.

Simultaneously, petrol and diesel prices were hiked for the 10th day in a row pushing it to the highest in 21-months.

On Monday petrol price was hiked by 46 paise/liter at Rs. 76.26/liter and diesel by 59 paise at Rs. 74.62/liter in country’s capital state Delhi. Due to difference in VAT, the rates vary from state to state.

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According to a reports, in October 2018, India’s crude purchase averaged $80/barrel when petrol cost Rs. 84/liter and diesel cost Rs. 75.45.

On January 2, the India’s crude purchase cost $66/barrel and the petrol, diesel price prices in Delhi stood at Rs. 76.01 and Rs. 67.96 respectively.

As taxes have risen to 70% from an average of 50%, consumers gets no relief.

In March, the centre raised excise duty on both fuels by Rs. 3/liter again in May, it was raised by Rs. 10/liter on petrol and Rs. 13/ltr on diesel.

Tuesday’s increase in petrol and diesel price marks the 10th straight day of rise in rates since oil companies on June 7 restarted revising prices in line with costs, after ending an 82-day hiatus.

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.

Oil PSUs Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) instead of passing on the excise duty hikes to customers adjusted them against the fall in the retail rates that was warranted because of fall in international oil prices.

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The hike in diesel rates is the highest daily increase since the state-owned fuel retailers started daily revision in rates in May 2017.

Now, the oil has rebound from $30/barrel to $38/barrel but the state-run retailers offset both the excise duty hikes against their margins, leaving no scope for offering relief to consumers.

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