Fuel prices hit new record highs in Delhi on Wednesday after oil marketing companies hiked rates further. The state-owned oil marketing companies hiked petrol prices in Delhi by 25 paise to 86.30 per litre from Rs 86.05 per litre while diesel prices too were hiked by 25 paise to Rs 76.48 per litre from Rs 76.23 per litre.
In Mumbai, diesel prices were hiked to Rs 92.86 per litre, thus witnessing new record high and petrol prices stood at Rs 83.30 per litre on Wednesday.
Interestingly, a day after Union budget, Rajya Sabha MP Subramanian Swamy had posted a photo on Twitter comparing India’s fuel prices with that of neighbouring Nepal and Sri Lanka. Swamy, who is known for no-nonsense approach when it comes to expressing his views wrote, “Petrol Rs 93 in Ram’s India, Rs 53 in Sita’s Nepal and Rs 51 in Ravan’s Lanka”.
However, a number of Twitter users accused Swamy of spreading factually inaccurate information.
The petrol price in Nepal on January 25 was recorded as 110 NPR per litre. In Indian currency, it translates to Rs 68.89.
In Sri Lanka, the petrol rate as of January 25 was reported as 161 LKR, which translates to Rs 60.62
The petrol rate in India was recorded as Rs 92.86 per litre in Mumbai, the country’s financial hub, on February 2. The rate in capital Delhi was Rs 86.30.
Thus, unlike what Subramanian Swamy suggests, the difference in petrol price between India and Nepal is Rs 20 at most places or slightly under or above. Compared to Sri Lanka, it is in the higher 20s and not 40s.
Why prices in India are higher than neighbouring countries?
It is not a secret that the retail price of petrol is higher in India than elsewhere. The price is raised by the taxes that are imposed on it by the government to fund its expenses in other sectors.
Central and state levies currently account for about 62% of the retail price of petrol and around 57% of the retail price of diesel in Delhi.
The central government hiked the excise duty on petrol to Rs 32.98 per litre from Rs 19.98 per litre at the beginning of 2019, increased the excise duty on diesel to Rs 31.83 per litre from Rs 15.83 over the same period to boost government revenues as economic activity fell due to the pandemic.
A number of state governments also hiked value-added taxes to boost revenues which were hit by low economic activity due to Covid-19 related restriction on movement of goods and people.
The fuel prices in India have been increasing since December, based on a global improvement in the crude oil rates. The country allows the oil corporations to ascertain the prices, based on the international factors.
The opposition parties have demanded that the Narendra Modi-led government reduce the duties levied on petroleum products to provide relief to consumers.
Finance Minister Nirmala Sitharaman, while presenting the Union Budget 21-22, on February 1, proposed a new agriculture cess of Rs 2.5 per litre on petrol and Rs 4 on diesel. The prices, however, would not be increased due to the cess because of a reduction in other duties, she had clarified.