A day after the Budget, petrol prices increased marginally in four metro cities. Delhi, Kolkata, Mumbai and Chennai saw a marginal hike of 5 paise in petrol price, while diesel prices remained the same. The new prices came into effect at 6 am on February 2. As mentioned in the Indian Oil Corporation’s website, petrol price in Delhi is now Rs 73.1, Rs 75.79 in Kolkata, Rs 75.82 in Chennai and Rs 80.96 in Mumbai.
Diesel prices were only slightly better at Rs 64.11 in Delhi, Rs 66.78 in Kolkata, Rs 67.62 in Chennai and Rs 68.27 in Mumbai.
Petrol and diesel prices have increased significantly since last year. Prices are primarily determined by global crude oil prices and foreign exchange rates. With crude oil price inching towards $70 a barrel, Oil Ministry had earlier sought the intervention of the finance ministry to cut down the excise duty on petrol and diesel in the Budget. The cut in excise duty would have offset the hike in global crude prices ahead of 2019 Lok Sabha elections.
However, another excise cut would have put an additional burden on the fiscal deficit target, in the aftermath of lower indirect tax revenues after GST. The Centre had however, increased excise duty earlier when the global crude prices had plummeted in order to gain from the dip.
In fact, excise duty on petrol has been hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre ever since PM Modi-led BJP government came to power in 2014.
On February 1, the Finance Minister cut basic excise duty on petrol and diesel by Rs 2 and additionally abolished another Rs 6 excise duty on fuel. However, the minister then announced a new road cess of Rs 8 per litre, leading to no change in the petrol prices.