NEW DELHI: Two days after voting for the
Karnataka elections took place, state-run fuel retailers lifted the 19-day freeze on daily revision of pump prices on Monday. As a result, petrol became costlier by 17 paise a litre to hit a level seen 56 months back and diesel by 21 paise to a new record in Delhi. The increase was higher in several other cities due to higher state taxes.
The move invited criticism from
Congress, with party chief
Rahul Gandhi tweeting, "Karnataka finishes voting, fuel prices rise to a 4-year high! The key principle of Modinomics: fool as many people as you can, as often as you can. #PeTrolled." Party spokesperson Randeep Surjewala wondered how many "more (price salvos)" the BJP government would fire.
With oil prices projected to remain high and the rupee falling against the dollar, focus is bound to shift to excise duty. The government had raised excise duty nine times between November 2014 and January 2016 - when crude went into a free fall - aggregating Rs 11.77 per litre on petrol and Rs 13.47 on diesel. Though oil prices have been moving up since August 2017, excise was cut only once by Rs 2 in October that year.
The retailers had last raised petrol and diesel prices on April 24 by 13 and 18 paise, respectively, in Delhi when the Indian basket - mix of crude bought by Indian refiners - averaged $69/barrel. It stood at $75.26 on Monday. The rupee has weakened from 66.39 on April 24 to 67.58 against the dollar. Prices of petrol at wholesale hubs have risen from $78.84/barrel on May 23 to $82.98 and diesel from $84.68 to $88.63. All these factors impact pump prices.
As reported earlier by TOI, the retailers decided to hold the price line on a "gentle nudge" from the government after pump prices hit a 55-month-high ahead of the Karnataka assembly polls but the finance ministry refused to cut excise duty. Oil minister
Dharmendra Pradhan, however, has stoutly denied any government role in fuel pricing since the market was freed in October 2014 and the oil companies junked the fortnightly price revision for daily pricing since June 2017.
Sanjiv Singh, chairman of India's largest oil refiner and fuel marketer IndianOil, had told TOIlast Tuesday that the freeze was "temporary" and was taken "to avoid spikes and panic in the market". He had also denied any political outlook behind the decision, describing as "coincidence" the fact that the freeze coincided with the campaign for the Karnataka election.
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