Petrol prices on Tuesday hit the highest level since the BJP government came to power in 2014, and diesel touched a record high of ₹63.20 a litre, prompting the Oil Ministry to seek a cut in excise duty.
Petrol price rose to ₹72.38 per litre in Delhi, highest since March 2014, according to daily fuel price list of State-owned oil firms.
Rates have risen by ₹3.31 per litre since mid-December.
In Mumbai, prices have crossed ₹80-mark — costliest in the country.
Diesel is being sold at ₹67.30 in Mumbai, where the local sales tax or VAT rates are higher.
Since mid-December, diesel rates have jumped ₹4.86 a litre, according to oil companies.
The spurt in rates, caused by the rally in international oil prices, has led to the Oil Ministry asking the Finance Ministry for a cut in excise duty in the Union Budget 2018-19, to be presented in Parliament next week.
The reduction sought is part of the pre-Budget memorandum submitted by the Ministry for the consideration of Finance Minister Arun Jaitley, officials said.
Oil Secretary K.D. Tripathi on January 22 stated that the Ministry has forwarded a set of recommendation it had received from the industry. He however refused to give details.
The Central government levies ₹19.48 per litre excise duty on petrol and ₹15.33 on diesel.
VAT on petrol in Delhi is ₹15.39 per litre while on diesel it is ₹9.32.
Brent and U.S. West Texas Intermediate crude — two of the most traded benchmark, on Tuesday rose to $69.41 per barrel and and $63.99 respectively. Brent is not far off the January 15 three-year high of $70.37 a barrel. WTI had hit its highest since December 2014, on January 16 at $64.89 a barrel.
The rally in oil prices has renewed calls to the government to cut excise duty to cushion the burden on common man, the officials said.
The BJP-led NDA government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but cut the tax only once in October last year by ₹2 per litre.
The excise duty in October 2017 was cut when petrol price had reached ₹70.88 per litre in Delhi and diesel was priced at ₹59.14.
Because of the excise duty cut, diesel prices had on October 4, 2017 come down to ₹56.89 and petrol to ₹68.38.
However, subsequent rally has wiped away all the gains and prices have touched new highs.
The October 2017 excise duty cut cost the government ₹26,000 crore in annual revenue and about ₹13,000 crore during the remaining part of the current fiscal year that ends on March 31, 2018.
The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.
In all, duty on petrol was hiked by ₹11.77 per litre and that on diesel by 13.47 a litre in those 15 months which helped the government’s excise mop-up to more than double to ₹2,42,000 crore in 2016-17 from ₹99,000 crore in 2014-15.
State-owned oil companies in June last year dumped the 15 year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight starting June 16 dropped but have been on the rise since July 4.
Since then prices are revised on daily basis. On January 23, price of petrol went up by 15 paisa per litre and that of diesel by 19 paisa.
