Lower cut in oil prices ahead as oil cos factor in higher excise duty

NEW DELHI: The Rs 3 per litre increase in excise duty in petrol and diesel has brought both good and bad news for consumers. The good news is that there would not be any increase in the retail selling price of the two petroleum products as a direct fallout of excise duty hike. But the bad news is that consumers would not get the required gains of lower auto fuel prices on account of a slump in international oil prices.

Sources in the public sector oil marketing companies said that Saturday’s retail price of petrol and diesel has fully factored in the Rs 3 hike in excise duty. Even after factoring in the higher cost, petrol prices fell 13 paise per litre to Rs 69.87 a litre and diesel by 16 paisa to Rs 62.58 in Delhi on Saturday as part of daily revision scheme in practice for auto fuels.

While this means that oil firms have adjusted increased duty against the recent fall in oil prices and the likely trend in the near future of subdued prices, in effect it means that OMCs were reaping a premium on the retail sale of petrol and diesel. This despite the market conditions demanding that the price of the two products be reduced sharply, which analysts say by over Rs 4-5 per litre, in view of almost 25 percent fall in global oil prices on Monday and crude falling by around 50 percent since early January. (IANS)

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