Petrol price hiked to Rs 73.73 per litre, fuel hits 4 year high

In yet another hit to their wallet, vehicle owners will have to shell out an amount that is definitely going to pinch. Oil companies have hiked petrol price today and thereafter the fuel has reached a 4-year high of Rs 73.73 a litre in Delhi. This has again led to calls being made for the government to cut excise tax rates and thereby provide some relief to consumers. Since June, 2017, oil firms have been revising auto fuel prices on a daily basis and today's hike was as much as 18 paise per litre an official price notification stated.

Petrol price in Delhi has jumped to Rs 73.73 a litre. The last time it reached these levels was in September 14, 2014 when tariffs had gone as high as Rs 76.06. Perhaps aware of the direction that fuel rates were likely to take in the near term, the Oil Ministry earlier in 2018 sought a cut in excise duty on petrol and thereby cushion the impact of rising international oil rates. However, in Budget 2018, Finance Minister Arun Jaitley, which he presented on February 1, did not oblige.

The reason why Indian petrol rates are the highest in South Asia is because taxes account for half of the rates prevalent at petrol stations. This state of affairs was due to Jaitley having raised excise duty rates as many 9 times between November 2014 and January 2016. The reason behind this was to shore up government finances because global oil prices fell. Albeit there was at least one instance when he cut the tax - in October last year by Rs 2 a litre. Petrol price was cut after it reached Rs 70.88 per litre in Delhi. Unfortunately, crude prices jumped even higher and pushed petrol prices higher thereafter. To give some relief to consumers in other states, subsequent to that excise duty cut, Centre had asked states to also slash VAT but only Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh did while  the rest did not.

In between November 2014 and January 2016, Centre had raised excise duty on petrol on nine occasions. In all, duty on petrol rate was hiked by Rs 11.77 per litre in those 15 months that allowed government's excise mop up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.