It's a busy week in the oil ministry in New Delhi. Petrol and diesel prices are rocketing and have hit record highs in the capital and in financial hub Mumbai. Industry lobby Federation of Indian Chambers of Commerce and Industry (FICCI) has called for an immediate cut in the excise duty on oil imports.
The Minister for Petroleum and Natural Gas, Dharmendra Pradhan, has said that "various alternatives are being looked at” to keep fuel prices in check. Pradhan, it appears, has very little room to manoeuvre.
Petrol retailed at Rs 76.57 in Delhi, Rs 79.24 in Kolkata, Rs 84.40 in Mumbai and Rs 79.47 in Chennai on 21 May.
The fuel is costlier by Rs 1.94, Rs 1.92, Rs 1.92 and Rs 2.04 in the four cities respectively since 14 May, the day oil marketing companies reverted to daily fuel price revisions after a 14-day hiatus, and after Karnataka had voted.
On the other hand, diesel sold at Rs 67.82 in Delhi, Rs 70.37 in Kolkata, Rs 72.21 in Mumbai and Rs 71.59 in Chennai on Monday. The fuel is costlier by Rs 1.89, Rs 1.74, Rs 2.01 and Rs 2.03 in the four cities respectively since 14 May.
Pradhan, and the regime must understand that time is of the essence here, especially with the middle classes loosing patience.
Fuel costs the most in the financial capital.
As such, opposition leaders have pulled up the Narendra Modi-led government for doing nothing to rein in rising prices.
Petrol now ₹84.40 per litre in Mumbai, of which, over 44% is tax paid to government. Mumbai accounts for 30% of India’s I-T collections & 20% of central excise tax collections. Mumbai is the goose that lays golden eggs but New Delhi is treating us like a milch cow #FuelPriceHike
— Milind Deora (@milinddeora) May 21, 2018
The Indian crude oil basket is priced at $72 a barrel while the price of the global benchmark -- Brent crude -- hovers at just above $80 a barrel.
If fuel prices keep going up, the consumer price index (CPI) can cross the five percent danger mark and once it is past six percent, there will be aggressive rate hikes from the Reserve Bank of India (RBI).
Earlier, one journalist likened the situation to 'day light robbery'.
— Faye DSouza (@fayedsouza) May 20, 2018
Incidentally, India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.
Updated Date: May 21, 2018 19:24 PM