Price of petrol on Monday breached the Rs 91-mark in Mumbai, while domestic cooking gas rate touched the Rs 500-level for the first time ever as oil hovers at four-year high.
Petrol prices were hiked by 24 paise a litre and diesel by 30 paise, according to a notification by state-owned oil companies.
Petrol in Mumbai now costs Rs 91.08 at Indian Oil Corporation outlets, Rs 91.15 at Bharat Petroleum Corporation Ltd stations and Rs 91.15 a litre at Hindustan Petroleum Corporation Ltd outlets.
Diesel in Mumbai costs Rs 79.72 and Rs 79.79 a litre at Indian Oil and BPCL outlets, respectively.
India is the third largest importer of crude oil and rising international oil prices are inflating domestic transport fuel costs in a strong demand environment.
Brent crude oil climbed to $83.27, up from $71 five weeks back, while the rupee lost ground against the dollar by five to six percent during the same period, resulting in expensive crude imports.
Since mid-August, the petrol price has risen by Rs 6.59 a litre and diesel by Rs 6.37 – the most in any six weeks after the daily price revision was introduced in mid-June last year.
All consumers have to buy cooking gas at market price. The government, however, subsidises 12 cylinders of 14.2-kg each per households in a year by providing the subsidy amount directly in bank accounts of users.
This subsidy amount varies from month to month, depending on the changes in the average international benchmark LPG rate and foreign exchange rate.
When international rates move up, the government provides a higher subsidy. But as per tax rules, the goods and service tax (GST) on LPG has to be calculated at the market rate of the fuel.
The price of non-subsidised or market-priced LPG in Delhi was hiked by Rs 59 a cylinder to Rs 879 mainly due to change in international price and foreign exchange fluctuations.
Delhi has the cheapest fuel rates among all metros and most state capitals because of lower taxes. Mumbai has the highest sales tax or value added tax.
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