Fuel Alert! Cut in global crude oil price, but govt may hike petrol, diesel rates; Here's why

Petrol and diesel rates have come down by Rs 5 to Rs 6 per litre so far this month and compared to October 4 highs, prices are down by up to Rs 7 per litre in major cities.

After touching $86.74 a barrel two months ago, international Crude oil rates have fell below $60. (Image: PTI)

New Delhi: Indian commuters have experienced a massive relief over the past few weeks in the backdrop of the decreasing fuel prices across the country. Petrol and diesel rates have come down by Rs 5 to Rs 6 per litre so far this month and compared to October 4 highs, prices are down by up to Rs 7 per litre in major cities of the country. However, fuel rates in the coming days might not be the same and could witness some hike as the government is now considering hiking excise duty on fuel by Re 1- Rs 2. A recent report by The Indian Express said that the excise duty cut of Re 1 a litre on both petrol and diesel announced by the central government on October 4 has hurt its fiscal position during the election season and hence it might consider strengthening the same by increasing excise duty on fuel. The 30 per cent fall in crude oil prices in the last two months has given room to the government to hike excise duty by Rs 1-2 per litre on petroleum products, the paper reported. The report came despite Finance Minister Arun Jaitley, while announcing the cut in excise duty by Re 1 in October, claimed that it would impact the government’s chest only by 0.05 per cent and would not affect the fiscal deficit target of 3.3 per cent of the Gross Domestic Product (GDP). After witnessing a relentless hike at $86.74 a barrel two months ago, international Crude oil rates have fell below $60. According to a report by news agency Reuters, the forecast for crude oil was $100 a barrel last month and now the outlook has been halved to $50. The US WTI crude futures were trading below $52 per barrel while Brent crude oil futures were above $60 per barrel. Fuel prices continued to be on a downward trend, tracking a fall in global oil prices. Petrol and diesel prices further decreased by 50 to 40 paise a litre in major cities on Wednesday. Petrol today retailed at Rs 74.07 a litre in Delhi, Rs 79.62 in Mumbai, Rs 76.06 in Kolkata and Rs 76.88 in Chennai. Likewise, diesel retailed at Rs 68.89 in Delhi, Rs 70.74 in Kolkata, Rs 72.13 in Mumbai and Rs 72.77 in Chennai.