Oil slips to 11-year low, firms cut petrol price by just 50 paise

Oil marketing companies on Tuesday reduced petrol price by mere 50 paise a litre and diesel by just 46 paise per litre despite crude oil prices touching 11 years low.

There is speculation that the Modi government may once again hike excise duty on petrol and diesel, so decrease on fuel prices has been less than expected. With this change, petrol in Delhi will cost Rs 59.98 a litre and diesel Rs 46.09 a litre.

Oil marketing companies revise petrol and diesel prices on 1st and 16th of every month based on average imported cost and rupee-dollar exchange rate in the previous fortnight.

The rate of basket of oil that India buys hit a 11-year low of $34.39 per barrel on Monday. However, an average for the fortnight which is taken into account for calculating new prices was $4-5 more.

“The current level of international product prices of petrol and diesel and rupee-US dollar exchange rate warrant a decrease in prices, the impact of which is being passed on to the consumers with this price revision,” said Indian Oil Corporation (IOC).

People are paying twice as the excise duty on petrol and diesel since BJP-led NDA government under Prime minister Narendra Modi came into power, according to a written reply of the government in the Parliament.

Oil minister Dharm-endra Pradhan in a written reply to a question in the Rajya Sabha earlier this month had said excise duty on petrol was Rs 9.48 per litre in April, 2014, which after five rounds of hikes has risen to Rs19.06.

Also the excise duty on diesel was Rs 3.65 per litre in April, 2014 which after five rounds of excise duty hikes has risen to Rs10.66.

The government had collected Rs 99,184 crore in excise collections from the petroleum sector in 2014-15. This was Rs 33,042 crore in the first quarter of the current fiscal.