Prime Minister Narendra Modi’s promise of Acche Din faces ground reality test as a Rs 4 per litre increase in petrol and diesel prices is in the offing. According to various media reports, this will happen soon if state-owned fuel retailers are to return to pre-Karnataka poll hiatus margin levels, brokerage firms said.
No sooner had Karnataka polled to elect a new state government, state-owned Indian Oil Corp (IOC), Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL) ended a 19-day hiatus in revising petrol and diesel prices and reverted to the practices of changing rates on a daily basis.
Since then petrol price has risen by 69 paisa a litre, including a 22 paisa hike effected today that took rate in Delhi to Rs 75.32, the highest in almost five years. Diesel prices have gone up by 86 paisa a litre, including 22 paisa increase that took the rate to their highest ever of Rs 66.79 a litre in Delhi.
“Our computation suggests that downstream oil marketing companies (OMCs) are required to increase retail prices of diesel by a steep Rs 3.5-4 a litre and gasoline (petrol) by Rs 4-4.55 per litre in the coming weeks to earn normative gross marketing margins of Rs 2.7/litre,” Kotak Institutional Equities said in a report.
The increase is based on assumption that global price of diesel and petrol and Rupee-US Dollar exchange rate remain stable hereon.
Senior Congress leader and former Finance Minister P Chidambaram has lashed out at the government in its failure to control fuel prices. He tweeted his anguish in his two tweets.
There we go again. More taxes on petrol and diesel, more burden on the consumer. The Karnataka election was only an interval.
— P. Chidambaram (@PChidambaram_IN) May 14, 2018
7. As the price of crude oil rises, the government is clueless and floundering. The prognosis, therefore, is crushing taxes, higher prices and greater burden on the average consumer.
— P. Chidambaram (@PChidambaram_IN) April 29, 2018