Fuel prices stay steady for 23 days since July 17

With the Tokyo Olympics and India’s splendid performance across multiple sports taking prime space in the past fortnight, what has gone unnoticed is that prices of petrol and diesel have remained unchanged for 23 straight days from June 17.

With 16 fuel prices each in May and June and then some in the first half of July, both petrol and diesel have scaled record highs, continuing to burn a hole in the wallets of hapless motorists and the transportation industry.

Of the four metros, fossil fuel prices are the highest in Mumbai where a litre of petrol costs Rs 107.83 a litre and diesel Rs 97.45. The Delhi motorist pays Rs 5.99 less for a petrol litre (Rs 101.84) and Rs 7.58 for a diesel litre (Rs 89.87) than its Mumbai counterpart.

Highly taxed fuels
One of the reasons for the wallet-busting fuel prices is the high level of Central and State taxes. For instance, in Delhi, on August 3, 2021, petrol cost Rs 101.84 a litre of which 32.30% (Rs 32.90) comprises excise duty and 23% (Rs 23.50) is State VAT. Club the two taxes and motorists are paying Rs 56.40 or 55.38% of each petrol litre as tax.

As regards diesel which cost Rs 89.87 a litre in the capital city on July 16 and is the same today, the excise duty component is Rs 31.80 or 35.38%, while VAT is Rs 13.14 or 14.62% of the retail price. Together, the two taxes account for Rs 44.94 or exactly 50% of the price a motorist pays to tank up on diesel.

In FY2021, the Centre got Rs 334,894 crore excise duty from petrol and diesel. The unabated increase in the price of fuels accelerated since end-April, after the election process in five states concluded. When elections were underway, motorists had for close to two months seen a welcome stoppage in fuel price increases.

Now with prices remaining unchanged for 23 days on the trot, motorists continue to be a relieved lot but will also be hoping that taxes are cut and prices reduced. But with the stormy monsoon session of Parliament, which commenced from July 19, set to end on August 19, will fuel prices begin their upward movement again?