Diesel price rises to highest-ever ₹64.58

The price of petrol rose to a four-year high of ₹73.73 a litre and that of diesel hit the highest ever at ₹64.58 here on Sunday, renewing calls to the government to cut excise duty.

The state-owned oil firms, which have been revising auto fuel prices daily since last June, raised the prices of the two fuels by 18 paise a litre each on Sunday, according to a price notification.

The petrol price is the highest since September 14, 2014, when it was ₹76.06. The previous record of diesel was ₹64.22 on February 7, 2018.

Earlier this year, the Petroleum Ministry sought a reduction in excise duty to cushion the impact of rising international oil prices, but Finance Minister Arun Jaitley, in his Budget presented on February 1, ignored the demand.

India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.

Mr. Jaitley raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but cut it just once — by ₹2 a litre in October 2017. In all, the duty on petrol was increased by ₹11.77 a litre and that on diesel by ₹13.47 in those 15 months, helping the excise collection more than double to ₹2,42,000 crore in 2016-17 from ₹99,000 crore in 2014-15.

Subsequent to that excise duty reduction, the Centre had asked the States to lower the VAT, but only Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh did so.

The October 2017 excise duty cut cost the government ₹26,000 crore in annual revenue and about ₹13,000 crore during the remaining part of the current fiscal year.

The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices. In all, duty on petrol rate was hiked by ₹ 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop up more than double to ₹ 242,000 crore in 2016-17 from ₹ 99,000 crore in 2014-15.

State-owned oil companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- in June last year dumped the 15-year old practice of revising rates on the 1st and 16th of every month . Instead, they adopted a daily price revision system to instantly reflect changes in cost. Since then, prices are revised on a daily basis.