The fuel prices were kept unchanged on Wednesday after soaring to record levels over the past few weeks. Petrol price in Mumbai crossed the landmark level of Rs 90 per litre on Monday. Owing to the lower taxes imposed by the state government, the transport fuel prices are lowest in Delhi whereas Mumbai has the highest sales tax or value added tax (VAT).
This relentless hike in fuel prices has caused a havoc-like situation in the country. However, several state governments are figuring out ways to control the situation. Recently, the West Bengal government reduced the excise on petrol and diesel by Re 1 per litre each. Later, even the Karnataka government announced that the petrol and diesel prices across the state would be cheaper by Rs 2 per litre each, following the reduction in cess on these fuels.
The domestic fuel prices, as per India’s pricing mechanism, depend upon the international fuel prices on a 15-day average and the value of the Indian rupee. The continuous depreciation of India rupee against the US dollar has been touted as one big reason behind the soaring fuel prices. Rates of petrol and diesel vary from city to city and from a pump to pump depending on local taxes and transportation cost.