Under pressure from several quarters over the all-time high fuel prices, the government seems to have found an alternative to reduce petrol and diesel prices in a way that it not only keeps consumer frustrations at bay but it also puts lesser burden on oil marketing companies without decreasing the excise duty on energy products. As per the Indian Oil Corporation data, petrol and diesel prices have been slashed for the 13th consecutive day -- after it touched record high of Rs 78.43 on May 29 -- by over Rs 1.80, while diesel by Rs 1.38.
The IOC data says petrol saw 20 paise cut on Monday while diesel prices were down 15 paise in the national capital. The price for a litre of petrol in Delhi, Kolkata, Mumbai and Chennai fell to Rs 76.58, Rs Rs 79.25, Rs 84.41 and Rs 79.48, respectively. In case of diesel, the price fell to Rs 67.95 in Delhi and Rs 70.50 in Kolkata. In Mumbai and Chennai, the prices were down to Rs 72.35 and Rs 71.73, respectively.
The recent cut in petrol and diesel prices has come as a relief to consumers ever since the oil marketing companies hiked the fuel prices by over Rs 4 in 16 days in the national capital only. The government, too, had come under huge pressure from opposition as well as consumers to cut the excise duty of the petroleum products. The excise duty on petrol as well as diesel is a huge source of revenue for the government, which charges Rs 19.48 per litre excise duty on petrol and Rs 15.33 on diesel.
Indian petroleum prices are determined by the cost of crude oil in international market. Prices of crude oil began to shoot up last year when the organisation of oil exporting countries decided to withhold the excessive output, which had brought down the prices to the lowest in more than a decade. The countries slashed the overall fuel supply by about 1.8 million barrels per day that created the shortage of crude which in turn spiralled the prices.
Now, all eyes are on July-22 meet of the OPEC countries as the outcome of this meeting will decide the future price of crude oil prices. Earlier, Oil Minister Dharmendra Pradhan had also said that the government was concerned about pinching fuel prices and was working on a long-term solution. He said that the present oil price jump is due to three main factors -- hike in the international price of crude, fluctuation in the dollar and Indian currency ratio, and some of the tax issues.