Diesel price hiked by Rs 1.09 per litre after polling ends

New Delhi: After a brief interruption, diesel prices were on Monday hiked by Rs 1.09 a litre, exclusive of state levies.

The monthly increases in diesel rates, which had been locate on hold just before India began voting to elect a new government, were back no earlier than polling ended Monday.

The hikes, helpful from midnight tonight, are exclusive of state sales tax or VAT and genuine increase will be superior and will vary from city to city, the oil companies announced.

Diesel price in Delhi will be hiked by Rs 1.22 a litre after together with taxes, to Rs 56.71 per litre, while it will cost Rs 65.21 a litre in Mumbai as alongside Rs 63.86 at present.

State-owned oil companies, which had last hiked diesel price on March 1, will lose Rs 5.71 a litre even later than today's hike.

The Cabinet had in January last year decisive that diesel prices should be raised by 40-50 paise a litre every month pending losses on the firewood are wiped out. However, oil firms skipped the hikes owing on April 1 and May 1 as UPA did not want to take disliked judgment throughout election period.

The delayed hikes have now been implemented.

 
Before today's augment, diesel prices had risen by a increasing Rs 8.33 a litre in 14 instalments because January 2013.

There will be no modify in petrol rates even though the oil firms were behind about 50 paise a litre due to reduction in value of rupee beside the US dollar.

Oil PSUs IOC, BPCL and HPCL had on April 1 skipped raising diesel rates as per the January 2013 conclusion of the dresser of small monthly raises, on the petition that proceeds wounded on the firewood have dropped beneath Rs 6 a litre.

They yet again did not lift rates on May 1 even though the wounded had climbed to Rs 6.80 per litre.

The Oil Ministry had at the time of shelving the April hike affirmed that an specialist board headed by Kirit Parikh optional that government present a fixed financial support of Rs 6 per litre on diesel and so there was no need to raise rates if the proceeds losses were lower this porch.

While the government is yet to recognize the Parikh panel recommendations, the Oil Ministry, wary of the political plunge out due to the not liked move to raise prices, approached the poll supervisory body towards March-end looking for its nod to keep monthly raises in abeyance.

The Election Commission did not take action to the Ministry's appeal for over a month, a progress that was cited to yet another time for not raising firewood rates on May 1 even though losses had surpassed the Rs 6 a litre entrance.

The Election Commission has now told the Ministry that since the proceeds loss on the firewood is at present Rs 6.80 per litre, it is for the Oil Ministry to take a verdict on raising rates.

"As a follow-up to the under-recovery on diesel having fallen under Rs 6 per litre, Ministry of Petroleum and Natural Gas had referred the matter to Election Commission of India on March 31, 2014. for that reason, PSU oil marketing companies did not augment prices of diesel on April 1, 2014 and May 1, 2014.

"As the planned change has not been established by the Election Commission, the oil marketing companies are necessary to effect both the price increases jointly," said Indian Oil Corp, the nation's major firewood vendor.

IOC said even after today's augment, oil firms will have an under-recovery (revenue loss) of Rs 5.71 a litre on diesel.

Diesel rates had risen frequently excepting just one time. Oil companies skipped raising diesel prices in April 2013, when congregation elections were detained in Oil Minister M Veerappa Moily's home state Karnataka. However, they made up by climbing diesel prices by 90 paise in the following month.

 

Veerappa Moily asks FinMin to cut duties on branded petrol, diesel

 
Oil Minister M Veerappa Moily has asked the Finance Ministry to cut duties on branded petrol and diesel that offer better mileage and help cut fuel consumption.

Currently, the finance ministry levies higher excise duty on premium or branded petrol and diesel, making them costlier than normal or unbranded auto fuel.

Ever since their introduction in 2002, sale of premium or branded fuels have dwindled from a peak of 5.9 million kilolitres of diesel and 3.4 million kl of petrol in 2007-08 to a mere 0.45 kl of diesel and 0.09 kl of petrol in 2012-13.

"To enhance the fuel efficiency of new generation vehicles, specialised products (branded petrol and diesel) were launched by oil marketing companies in line with global trends and in keeping with the technological advancement in the automobile industry," the Oil Ministry said in a statement issued on completion of one-month of fuel conservation drive.

Moily has "requested the Ministry of Finance to review the duties levied on branded fuels to bring down the price differential so that consumers opt for branded fuel and this will help improve the fuel efficiency (by about 2 per cent) resulting in reduction in overall demand for petroleum products," the statement added.

The Finance Ministry had in 2009 Budget introduced new duties on branded fuels, which raised the differential between regular and branded fuel. "Due to this, sales of branded fuels have started sliding," the oil ministry's statement said.

Currently, the government levies an excise duty of Rs 1.20 per litre on normal or unbranded petrol while the same on branded petrol is Rs 7.50. Similarly, unbranded diesel attracts an excise duty of Rs 1.46 per litre while Rs 3.75 duty is levied on branded diesel.

While a litre of regular/normal or unbranded petrol costs Rs 72.45 in Delhi, branded petrol is priced at Rs 81.88. Similarly, normal diesel in Delhi costs Rs 52.54 a litre while branded diesel is priced at Rs 67.93.

Also, in September 2012, the government stopped providing subsidy on branded fuel, resulting in further dip in sales.

The current unbranded or normal diesel price of Rs 52.54 a litre includes a subsidy of Rs 9.20.

Moily says the reduction in excise duty by Rs 6.30 per litre on petrol and Rs 2.29 on diesel would not impact government revenues as current sale of branded fuels was "meager". But it would help in conservation as these fuels provide improved engine performance to yield 2 per cent savings in consumption.

Branded petrol and diesel is priced at a premium to regular fuel as additives put in them remove harmful deposits from engines, prevent corrosion, reduce emissions and lower maintenance costs.

India to unveil steps to cut fuel consumption on Sept 16

New Delhi: The oil minister will come up with some plans for lowering fuel consumption on September 16, Foreign Minister Salman Khurshid said on Friday, in a bid cut the country's import bill amid a sharp fall in the rupee.

Asia's third-largest economy could announce a steep hike in diesel prices later this month as it looks at measures to cut oil costs by nearly USD 20 billion after the rupee's slide has left India facing an oil bill potentially 50 percent higher than on May 1.

"No matter what happens, we will have to cut down on fuel consumption," Khurshid told business channel CNBC TV18. "You can't keep subsiding costs of fuel and not restrict the use of the fuel."

Khurshid said increasingly people are realising the "inevitability" of moving away from government-controlled prices.

"That's beginning to happen, but has political implications," he said.