Big hike in fuel prices expected
India deregulated the price of petrol in 2010 and that of diesel in 2014.
New Delhi: Petrol and diesel prices may see an increase of Rs 5 to Rs 6 per litre on Thursday as international prices of crude oil have soared.
The fuel prices are revised every 15 days, taking into account international prices of crude and the value of the rupee against the dollar.
Indian basket crude oil prices have seen a big jump from an average of $44.46 per barrel in November to $53.38 on Tuesday.
However, according to sources, the government may decide not to hike the prices in a single go to soften the blow on ordinary citizens in the wake of demonetisation. India deregulated the price of petrol in 2010 and that of diesel in 2014.
There has been criticism of the Modi government that, while it passes hike in crude oil prices to people, the benefit from lower crude was not fully transmitted to the consumers.
Instead the government hiked excise duty whenever crude oil fell by a large margin.
Crude oil prices were at $ 110 per barrel in 2010 against $ 44 per barrel last month. But the fall in prices in petrol and diesel for the common man has been to a lesser extent.
The total taxes by Centre on unbranded petrol comes to Rs 21.48 per litre against Rs 9.48 per litre in April, 2014 during UPA II. Delhi government VAT comes to around Rs 14.09 a litre on petrol. This means that petrol which costs Rs 66.10 per litre in Delhi, around Rs 35.57 is only Central and state taxes.
The total excise duty on diesel is Rs 17.16 per litre against Rs 3.65 per litre in April, 2014. Delhi government impose VAT at a rate 17 per cent, which means that taxes form 46.5 per cent of the retail price of diesel.