Petrol, diesel prices hiked across India for the second consecutive day

New Delhi: Petrol and diesel prices were hiked by 60 paise per litre each on Monday, for the second day in a row, as state-owned oil firms reverted to daily price revisions after a hiatus of almost three months.

Petrol price in Delhi was hiked to Rs 72.46 per litre from Rs 71.86 on Sunday, while diesel rates were increased to Rs 70.59 a litre from Rs 69.99, according to a price notification of state oil marketing companies.

This is the second daily increase in rates in a row. Oil companies had on Sunday raised prices by 60 paise per litre on both petrol and diesel after ending an 82-day hiatus in daily rate revision.

Daily price revision has restarted beginning Sunday, an oil company official said.

Oil PSUs, Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL), had put daily price revisions on hold soon after the government on March 14 hiked excise duty on petrol and diesel by Rs 3 per litre each.

Oil companies did not pass on the excise duty hike to customers and instead set them off against the decline in retail prices that should have effected to reflect the slump in international oil rates due to fuel demand fast evaporating following the outbreak of coronavirus pandemic.

They kept accumulating the gains arising from international oil prices dropping to a two-decade low in April and set them off against the May 6 increase in excise duty on petrol by Rs 10 per litre and Rs 13 a litre hike in taxes on diesel.

The Re 1 per litre cost of an upgrade to ultra-clean BS-VI grade fuel from April 1 too was adjusted against the lowering of retail prices required due to fall in international oil rates.

India imports 85 per cent of its oil needs and retail fuel prices are benchmarked against international rates. It shifted to daily revision in fuel prices from June 16, 2017 to reflect market dynamics in pump rates.

The official said petrol and diesel prices were frozen due to extreme volatility in the international oil markets.

Since the markets have relatively stabilised, daily price revision has started again, he said.

Despite the volatility, the PSUs regularly revised jet fuel or ATF and LPG prices, which too are priced at international benchmarks.

ATF prices, which since March are revised every fortnight instead of month revisions to pass on the benefit of falling rates to airlines instantaneously, were cut seven times since February and only hiked once earlier this month. LPG continues to be revised on a monthly basis and had been cut thrice before the hike effected on June 1.

The government mopped up close to Rs 2 lakh crore in additional revenues from the March 14 and May 6 excise duty hikes.

The total incidence of excise duty on petrol has risen to Rs 32.98 per litre and that on diesel to Rs 31.83. The excise tax on petrol was Rs 9.48 per litre when the Narendra Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.

While IOC, BPCL and HPCL absorbed excise duty hikes, they have promptly passed to consumers increases in VAT rates by sundry state governments including Rs 1.67 a litre increase in tax on petrol and Rs 7.10 increase on diesel by the Delhi government on May 5 - just a day before the Union Government effected the massive excise duty hike.

The firms had last revised price of petrol and diesel on March 16 and had kept the rates on hold since barring the times when state governments raised VAT.