Petrol, diesel prices scale new highs on rupee woes

Since mid-August petrol price has risen by ₹3.42 a litre and diesel by ₹3.84 per litre as rupee hit record low against the US dollar making imports costlier

In Delhi, petrol costs Rs 80.87 and diesel Rs 72.97.

On Monday, petrol prices touched Rs 88.12/litre in Mumbai, while diesel cost Rs 77.32 per litre in Mumbai. They blame the government's unwillingness to cut excise duty for the high fuel prices and consumer burden.

Thanks to the fall in the dollar-rupee and rise in petrol and diesel prices, states will garner an additional Rs 22,700 crore in revenue over and above budget estimates, according to a State Bank of India (SBI) research note. The Chief Minister condemned the statement of Union Petroleum Minister Dharmendra Pradhan that petrol prices had increased because of the increase in crude oil prices in the global market and increase in Value-Added Tax by state governments. This windfall gain may push down the states fiscal deficit by 15-20 basis points, if other things remain unchanged, the report said. Across all states, Maharashtra pays the most for petrol because of a high VAT of 39.12% in Mumbai, Thane and Navi Mumbai, while the tax rate for the rest of the state is 38.11%.

However, the court asked the government to consider an earlier representation pending before it on price rise of petrol and diesel and listed the matter for further hearing on November 16.

Ghosh sees the largest revenue gain for Maharashtra (Rs 3,389 crore), followed by Gujarat (Rs 2,842 crore).

But on Tuesday, the Andhra Pradesh assembly passed a resolution to roll back petrol and diesel prices by Rs 2 per litre.

The Central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October previous year by Rs 2 a litre. "The problem with the states is that even as many have a revenue surplus, they are using the surplus revenue to finance capital expenditure and interest obligations", it said.

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