After a 19-day pre-Karnataka poll hiatus, petrol price was on Monday, 14 May, hiked by 17 paise a litre and diesel by 21 paise, as PSU oil firms began passing on the spike witnessed in international rates to consumers, reported PTI.
Petrol prices in Delhi was hiked to Rs 74.80 per litre from Rs 74.63, while diesel rates were increased to Rs 66.14 a litre from Rs 65.93, according to a price notification issued by state-owned oil marketing companies.
With this, diesel prices have touched a record high, while petrol is at a 56-month peak.
Oil PSUs, who had kept rates unchanged for nearly three weeks before Karnataka went to polls despite input cost spiking, reverted to daily revision in prices no sooner had the state voted to elect a new government on Saturday.
Soon after the news of the price rise surfaced, the opposition slammed it as "poll politics", with Congress president Rahul Gandhi taking a dig at the Modi government for ‘fooling’ people.
Former Finance Minister P Chidambaram also spoke out against the move, as he tweeted:
In the other metropolitan cities of Kolkata, Mumbai and Chennai also, petrol prices were at multi-year high levels of Rs 77.50, Rs 82.65 and Rs 77.61 a litre on Monday, reported IANS.
Prices of diesel on Monday, in Kolkata, Mumbai, Chennai were Rs 68.68, Rs 70.43 and Rs 69.79 per litre, respectively.
State-owned oil marketing companies are estimated to have lost about Rs 500 crore as they absorbed higher cost resulting from the spike in international oil rates and fall in rupee against the US dollar.
Oil PSUs, which have been since June 2017 revising auto fuel prices on a daily basis to reflect changes in the cost, have kept pump rates static since 24 April, an analysis of daily price notification issued by oil companies showed, reported PTI.
Oil PSUs have refused to acknowledge if the freeze followed a government diktat so as to help the BJP in Karnataka.
Meanwhile, addressing the media in Dubai, Union Petroleum and Natural Gas Minister Dharmendra Pradhan, said, “Oil price hike is pinching the Indian consumer. Nobody can predict the price of oil.”
Indian Oil Corp (IOC) Chairman Sanjiv Singh last week said that the state-owned firms were "temporarily moderating" prices to avoid sharp spikes and panic among consumers.
Petrol and diesel prices were last revised on 24 April when they were hiked by 13 paise each. But prices were frozen thereafter. This, despite benchmark international rate for petrol going up from $78.84 per barrel, which was used for raising the price to Rs 74.63 a litre on 24 April, to $82.98 now, according to sources privy to fuel pricing methodology.
The benchmark international diesel rates during this period have climbed from $84.68 per barrel to $88.63. Also, the rupee has weakened to Rs 67 per US dollar from Rs 66.62, making imports costlier.
‘Govt is Blatantly Lying’
Apart from Rahul Gandhi and Chidambaram, several other opposition politicians, along with journalists and others, took to Twitter to criticise the price hike.
Oil Prices Reduced Before Gujarat Polls
Oil Minister Dharmendra Pradhan had last month denied reports of a directive to state oil firms to absorb at least Re 1 a litre hike by not raising prices in line with the cost.
The prices at the petrol pumps of state-owned fuel retailers like Indian Oil Corp (IOC) were cut by one-three paise every day in the first fortnight of December 2017 before Gujarat went to polls.
They started moving up immediately after polling for Assembly elections in Gujarat concluded on 14 December, leading to speculation that government may have asked oil companies to hold the prices.
State-owned oil companies in June 2017 dumped the 15-year old practice of revising rates on the first and 16th of every month, and instead, adopted a dynamic daily price revision to instantly reflect changes in cost.
If this practice was followed in letter and spirit, petrol and diesel prices should have been increased by Rs 1.5 a litre in last 19 days, an analyst tracking the sector told PTI.
The government had in June 2010, freed petrol price from its control and the diesel rates were deregulated in October 2014. Prices have since then moved more or less in tandem with international rates barring a few exceptions like the period before a crucial election.
Finance Secretary Hasmukh Adhia and Economic Affairs Secretary Subhash Garg have in the past weeks ruled out any immediate reduction in excise duty to cushion the increases warranted from a spike in international oil price.
The BJP-led government had raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.
(With inputs from PTI and IANS)
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