There is no relief for consumers as state-run oil marketers increased prices of petrol and diesel for 12 days in succession amid rising political pressure on the Narendra Modi government.
The price of petrol was hiked by 36 paise today to Rs 85.65 a litre in Mumbai, while that of diesel was raised by 24 paise to Rs 73.20 a litre, according to data released by Indian Oil Corporation Ltd. Petrol and diesel are costlier by Rs 3 a litre and Rs 2.77 a litre, respectively, since May 14, when oil marketing companies resumed daily price revisions after a 19-day freeze in the run-up to the Karnataka elections.
The continuous rise in fuel prices is attributable to a rally in oil prices in the past few weeks. Brent crude, which snapped its three-day gain and fell 1.3 percent to close at $78.79 a barrel on Thursday, was trading 0.1 percent lower at $78.67 a barrel as of 10:15 a.m today.
Opposition Slams Modi Over Fitness Challenge
Prime Minister Narendra Modi, who accepted a fitness challenge posed by Indian cricket team Captain Virat Kohli, drew criticism from the opposition leaders who dared him to tackle the challenges faced by common Indians instead.
Congress President Rahul Gandhi asked Modi to take a “fuel challenge” by reducing prices or face a nationwide agitation. Several other opposition members took to Twitter to dare the prime minister to take various challenges.
NITI Aayog Urges Centre To Cut Duty On Petrol
NITI Aayog, the central government’s policy think tank, on Thursday urged state governments to cut duty on petrol.
States have the capacity and must reduce the duty on petrol, while the Centre should create fiscal space to deal with the impact of a spurt in oil prices, NITI Aayog Vice Chairman Rajiv Kumar told PTI.
There is merit in reducing the duties but both by the states and and the Centre. More so for the states as they tax the oil on ad valorem basis...So states can take that cut much more and better than the Union government.Rajiv Kumar, Vice Chairman, NITI Aayog
Kumar said not only petrol but electricity should also be brought under the ambit of the Goods and Services Tax.
Windfall Tax On ONGC
The Centre is deliberating on an “immediate solution” to deal with rising fuel prices, Union Oil Minister Dharmendra Pradhan told reporters on Thursday.
"The oil ministry is of the view to bring petroleum products under the purview of the GST in order to bring down the prices of petrol and diesel,” said Pradhan.
The comments came hours after PTI reported that the central government might levy a windfall tax on Oil & Natural Gas Corporation Ltd. as part of a solution it is working on to moderate the rising retail fuel prices.
Experts cautioned that such a move may have unintended consequences. “A windfall tax will disappoint both domestic and foreign firms foraying the oil exploration and production industry and will damage the sector,” oil and gas expert Kirit Parikh told BloombergQuint in an interaction.
Shares of ONGC rose as much as 0.9 percent to Rs 169.2 apiece in early Friday trading, after closing 4.4 percent lower on Thursday.