AGENCIES, Kolkata: It defies conventional logic and many have questioned the Government of India’s retail fuel pricing policy on petrol and diesel.
It’s very rare that India’s consumers have actually benefitted from low global oil prices. The price of Brent Crude (one of the main benchmarks for oil prices) fell from close to $52 per barrel on 6 March to $31.49 per barrel on 8 March. On 11 March, the price had recovered to $36.4 per barrel. Such is the volatile nature of pricing of liquid gold as Saudi Arabia and Russia refuse to listen to OPEC.
Back home, on Saturday, the government announced a Rs 3.00 per litre hike in excise duties on both diesel and petrol. The notification said that the special excise duty on petrol was hiked by Rs 2.00 per litre to Rs 10.00 per litre and to Rs 4.00 per litre for diesel. Road cess on both petrol and diesel has also been increased by Re 1.00 per litre to Rs 10 per litre.
The government claims that the price of petrol had hit a 9-month low of Rs 70.00/litre in the capital and that of diesel had hit a 13-month low of Rs 64.74/litre after a price war between major oil-producing countries slashed international crude oil prices by 25%. Saudi Arabia triggered the crash in prices by announcing a sharp increase in oil production after Russia declined to reduce oil supply to contain a fall in oil prices due to declining demand in a meeting of petroleum exporting countries
According to sources in the government, the current exercise is an attempt to shore up more revenues even as the falling demand on the back of the coronavirus outbreak and price wars between oil suppliers.