Fuel price soar: Diesel up by 14 paise, petrol 13 paise as rupee weakens to a new low

Fuel prices have been increased by the Oil Marketing Companies (OMCs) for the third consecutive day today. After hitting record highs yesterday, diesel prices soared to new high across the country again today.  The price of diesel rose by 14 paise to Rs 69.75 per litre and petrol by 13 paise to Rs 78.18 per litre in the National Capital Region (NCR) today. The revised rates are applicable from 6 AM from today (29 August). According to the daily price notification issued by state-owned oil firms, diesel is priced at, Rs 74.05 in Mumbai, Rs 72.60 per litre in Kolkata and Rs 73.69 per litre in Chennai. Petrol is retailing at Rs.85.60 per litre in Mumbai, Rs. 81.11 per litre in Kolkata and Rs. 81.22 per litre in Chennai. The surge in fuel prices is largely attributed to the weakening rupee. The rupee on Wednesday collapsed to a lifetime low of 70.52 by plunging 42 paise against the dollar on strong month-end demand for the American currency amid foreign fund outflows. Consistent dollar demand from banks and importers, mainly oil refiners, following higher crude oil prices, kept the rupee under pressure. At the interbank foreign exchange market, the rupee opened lower at 70.32 a dollar against 70.10 previously and dropped further to a new low of 70.52 in late morning deals, down by 42 paise. Furthermore, dollar’s strength against some currencies overseas also put pressure on the rupee, dealers said. [caption id=“attachment_4476159” align=“alignleft” width=“380”]  Petrol station. Representational image. Reuters.[/caption] On Monday and Tuesday, diesel prices touched record high levels across metro cities on Monday, barring Mumbai, and prices of petrol too inched nearer their all-time peak across major cities. The Central and state government are not in favour of bringing petrol and diesel will not come under the purview of Goods and Services Tax (GST) in the immediate future on fears of heavy revenue loss, a top source said recently. When the one-nation-one-tax regime of GST was implemented in July last year, five petro-products - petrol, diesel, crude oil, natural gas, and aviation turbine fuel (ATF) were kept out of its purview, for the time being, a PTI report said. If the two fuels are put under GST, the Centre will have to let go Rs 20,000 crore input tax credit it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the GST regime. States, on the other hand, want to keep a revenue tool in their hand to meet any contingency like the floods in Kerala, he said. The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 percent sales tax is charged on both the fuel.