Published: Wed, May 16, 2018
Tech | By Dwayne Harmon

Petrol, diesel prices rise as Karnataka elections end

Petrol, diesel prices rise as Karnataka elections end

More taxes on petrol and diesel, more burden on the consumer.

"We have made a decision to temporarily moderate retail prices by not passing on the required increase as we believe the current worldwide oil product prices are not supported by fundamentals".

The NDA government has been criticised for the significant and frequent hikes in the prices of petrol and diesel, with several politicians calling for fuel to be included under the Goods and Services Tax (GST) from which it is now exempt. 98 now, according to sources privy to fuel pricing methodology. On annualised basis, a one-rupee reduction in margin results in an annual revenue shortfall of Rs 130 billion for OMCs. It has already depreciated 5 per cent this year, and if it continues to slip, sharper fuel price hikes in the near future will no longer remain mere speculation.

"As soon as Karnataka election is over, government has chose to increase petrol and diesel prices".

The price hike now is to compensate for the loss incurred during this period. "The government wants to control the price hike but there are too many things which control the hike in prices", said Anila Singh of the BJP on Mirror Now.

If global prices continue to rise, or even remain stable, a serious dent to the profits of OMCs and dividend to the union government can not be ruled out.

The government had between November 2014 and January 2016 raised excise duty on petrol by Rs 11.77 a litre and that on diesel by Rs 13. International Olympic Committee slipped 1.04 per cent to Rs 167. Ltd (IOCL), Bharat Petroleum Corp. Value-buying has since slowly pushed up prices. The prices at petrol pumps of state-owned fuel retailers like Indian Oil Corp (IOC) were cut between 2-4 paise every day in the first fortnight of December 2017 before Gujarat went to polls. Indian Oil Corporation Ltd's marketing margins, for instance, reduced from an estimated Rs 3.4 per litre to Rs 0.6 per litre for petrol and from Rs 3.8 per litre to Rs 0.8 per litre for diesel.

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