homevideos Newsenergy NewsExplainer: Why petrol and diesel prices are not declining despite fall in global crude prices
Explainer: Why petrol and diesel prices are not declining despite fall in global crude prices
Even as global crude prices ease from their peak, the price of petrol and diesel at the fuel pump has not changed since early April. Sources in the government hint that retail fuel prices have not been reduced to primarily balance out the losses booked by oil marketing companies who have purchased crude oil at higher levels.
Even as global crude prices ease from their peak, the price of petrol and diesel at the fuel pump has not changed since early April. Sources in the government hint that retail fuel prices have not been reduced to primarily balance out the losses booked by oil marketing companies who have purchased crude oil at higher levels.
The retail fuel prices moved last in early April, with OMCs revising the rates based on global crude oil price movement and on May 22, when the union government decided to ease high petrol and diesel prices for consumers by cutting Centre's share with Rs 8 per litre cut in petrol and Rs 6 per litre cut in Diesel. But, since then, no price revision has happened when it comes to petrol and diesel.
Prior to May, a cut was announced on the eve of last Diwali. This was a Rs 5 per litre cut in petrol and Rs 10 per litre on diesel. But, the levies were hiked too, it was in May 2020, on account of the COVID-19 pandemic, to shore up funds, to meet the requirements of a health emergency, the government had levied Rs 10 per litre of central taxes on petrol and Rs 13 per litre on diesel.
However, these excise cuts need to be seen with the global crude oil price movement. Since the last excise cut that was announced by the government, Brent crude oil prices are down by 23 percent. Under the de-regulated price mechanism, the prices should have moved but there has been no revision announced, neither by retailers nor by the government in the past few months.
Currently, on petrol, in a per litre price that consumers pay, the union government gets Rs 19.90 as its share. Similarly, the union government gets Rs 15.80 as its share from the price consumer pays for one litre of diesel.
Based on these central levies, the union government has so far made some handsome collections from fuel. According to sources, in May, the government got Rs 30,700 crore, in June another Rs 30,400 crore, Rs 23,919 crore in July, Rs 28,816 crore in August and Rs 25,962 crore in September. Since indirect taxes are paid with one month lag, the collections are of the sales made in the previous month.
So, if the government decides to cut even Rs 1 per litre on petrol and diesel, it costs Rs 1,300 crore per month to the exchequer based on the March retail fuel consumption numbers.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Telangana Lok Sabha elections 2024: Asaduddin Owaisi to Bandi Sanjay Kumar, a look at key candidates
May 11, 2024 3:32 PM
Lok Sabha elections 2024: Hyderabad to Kadapa, key seats in fourth phase
May 11, 2024 2:54 PM
Telangana Lok Sabha elections 2024: List of BRS candidates
May 11, 2024 1:55 PM