Oil Minister Dharmendra Pradhan has ruled out a reduction in excise duty to bring relief
to petrol and diesel consumers after
prices sharply rose in the past two months.
Petrol and diesel prices have risen Rs
6.03/litre and Rs 3.68/litre respectively since July 1 in Delhi. Petrol is
priced at Rs 69.12/litre and diesel Rs 57.01/litre in Delhi, according to
Indian Oil Corp website. Prices in other states vary due to local levies but
have witnessed a similar hike.
The current prices of petrol and diesel do not
warrant a cut in excise duty, Pradhan told reporters. Government does not control
the domestic prices of two fuels, which move in tandem with international rates.
Price control on petrol was lifted in 2010 and
on diesel in 2014. Until June 15 this year, state oil companies used to
fortnightly revise prices to align them with international rates and factor in
currency fluctuation though price hikes were skipped or delayed in some
fortnights to avoid political controversy especially during polls. From June
16, companies switched to daily revision. This meant the price changes would be
so small that it would skip the attention of most consumers or opposition parties.
In the days after the daily price revision was
launched, petrol pump dealers strongly opposed it, claiming inventory losses
due to price decline hurt profitability and could erode the working capital of
small pumps. Petrol fell Rs 2.17 per litre and diesel Rs 1.03 per litre between
June 16 and June 30. But their protest withered after prices reversed trend and
started climbing up in July resulting in inventory gains and increased
profitability. Meanwhile, companies also substantially raised dealers’ commission
to buy their cooperation.