Published: Mon, May 28, 2018
Finance | By Gustavo Carr

Fuel prices surges for 15th day, touches Rs 78

Fuel prices surges for 15th day, touches Rs 78

"Public perceptions change fast and if the current price rise continues, it would be hard to tone down public anger and get their favour in the form of votes again", said an official of oil marketing firm not willing to be named.

Today the petrol price of New Delhi has touched a new high of Rs 78.12 per litre higher by 15 basis points compared to previous day price of Rs 78.27 per litre.

"When crude prices were falling from November 2014, the repeated increase of duty was a strategic error of the government". Narendra Modi promised to bring down prices of all commodities if BJP is voted to power. However, the Centre is also voicing its opinion that subsidising petrol and diesel to reduce the retail prices will take away funds kept aside for various welfare schemes.

However, worldwide crude oil prices have fallen significantly since their peak in May - the Brent crude variety has lost 6.4% and West Texas Intermediate variety declined 9.1%, Reuters reported. So, taxing these companies will not have any significant impact on bringing the price of the final product down.

Globally, windfall tax is occasionally levied by some countries, including the United Kingdom and Australia. The following table explains the matter.

More news: Everton finally set to sack Allardyce

The government said it is likely to levy a "windfall tax", in the form of a cess, on companies like Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) for any revenue that they earn from prices crossing $70 a barrel.

In such a precarious scenario, where inflationary trends may rear its head at any time, Pradhan's attempts at restoring normalcy has been rather hollow even if the call for including petrol and diesel in GST is not for him to make.

Brent crude futures, the global benchmark for oil prices, traded at $74.76 a barrel on the ICE. In December, 2017 crude price for Bent was $ 66.2 per Barrel which came down to $ 60 in 2018.

Petrol in Kolkata is being sold at the rate of Rs 80.76 and at Rs 81.11 in Chennai. At the same time the rates of taxes are also on the increase. Central government puts the additional tax of Rs 10 on every litre of petrol. During the day, it tanked 11.44 per cent to Rs 155.45.

Like this: