The fuel prices continue to increase across the country. On Thursday, oil marketing companies raised price of petrol by 16 paise a litre and diesel by 14 paise a litre.
After the increase, petrol was retailing at Rs 79.92 in New Delhi and diesel was selling at Rs 80.02 a litre.
The diesel price increased for 19th day in a row since the daily revision of prices started in June 7 after a gap of 82 days due to lockdown. The price of petrol was unchanged on Wednesday, after a gap of 17 days. Diesel prices in Delhi had shot past petrol prices on Wednesday for the first time ever.
Chairman of state-run Indian Oil Corp (IOC), Sanjiv Singh, said that higher diesel price in Delhi was a result of a steep hike in Value Added Tax or VAT by the state government.
He said VAT is lower in other cities which has meant diesel remains cheaper than petrol. “The Delhi government had increased VAT on petrol from 27 per cent to 30 per cent and that on diesel from 16.75 per cent to 30 per cent on May 5,” said Singh.
State-owned fuel firms benchmark retail rates to Arab-Gulf international oil prices and a formula decides them, the IOC chairman said, adding that demand dropped drastically in the aftermath of lockdowns imposed across the globe to curb spread of coronavirus, sending oil prices plunging to multi-year low.
This included oil futures falling below zero on one day in US trading. Reducing prices in line with that fall was not “sustainable” as cracks – the difference between crude oil (raw material) and petroleum product (finished goods) prices – were running negative, he said.
Singh said the companies returned to revising rates after international markets stabilised. This included passing on the excise duty increase.
The government has been facing the Opposition’s ire over the fuel price increase. The Congress has directed state units to stage a dharna (sit-in protest) at all district headquarters across the country on June 29 against the rising prices of diesel and petrol.
Left parties – Communist Party of India (Marxist), Communist Party of India, Communist Party of India (Marxist-Leninist), Revolutionary Socialist Party and All India Forward Bloc – have also criticised the government over the fuel price hike.