It noted if the prices are market determined, the retail prices should have been less than Rs 40 a litre.
New Delhi: Consumers are getting restive about a three year high in petrol and diesel prices as they feel that the concept of market-determined rates was tampered with by frequent tax hikes when the crude oil prices fell steeply, said industry chambers on Sunday.
It noted if the prices are market determined, the retail prices should have been less than Rs 40 a litre. It pointed that even after rising in the last three months, crude oil prices are mere half of $107 per barrel in May, 2014.
“It is true that the international crude oil prices have shot up by about 18 per cent from $45.60 per barrel, taking the pump prices of petrol in Delhi (for instance) to Rs 70.39 per litre from Rs 65.40 three months ago. The increase in the retail prices is far less than hike in crude oil, but then the consumer is not willing to compare the crude prices of $45.60 in June versus $54 per barrel today. He would confront you with $107 per barrel of crude in May, 2014 and the pump price of Rs 71.51 per litre on June 1, 2014,” said Assocham.
With $107 per barrel, the retail price of auto fuel was 71.51 per litre, then how come it is about the same when the Indian basket of crude is trading at half that level at 53.83 per barrel, the consumers would ask, said the chamber.
It said, even though the pricing regime has been linked to market determined rates, hike in taxes in the form of excise and sales tax or VAT by the Centre and states have distorted the path of reforms.