Comic Relief: Petrol, diesel prices cut only by 1 paisa
The reduction in petrol and diesel prices was today revised by just 1 paisa/liter, with state-owned oil companies blaming clerical error for previously announcing a cut of up to 60 paise. This morning the firms had announced a reduction in petrol price by 60 paise and diesel by 56 paise a liter in Delhi. Now, they revised the cut to just 1 paisa/liter.
Delhi has the cheapest price among all metro cities
The marginal reduction comes after 16 days of consecutive price increases since May 14, when fuel retailers ended a 19-day pre-Karnataka poll hiatus to pass on a spike in global oil rates. In all, petrol price was increased by Rs. 3.8 per liter and diesel by Rs 3.38 in that fortnight. Petrol in Delhi now costs Rs. 78.42 per liter and diesel, Rs. 69.30 per liter.
Oil companies blame clerical error for previous announcement
"The reduction was supposed to be 1 paisa but due to a clerical error the price prevalent on May 25 was communicated as today's price," a senior official of Indian Oil Corp (IOC), the nation's largest fuel retailer, explained.
But, are oil companies to blame for the continuous hike?
Petroleum companies maintain that the global increase in crude oil prices is beyond their control, and that they can't do much as they operate on thin margins. Yet, it's interesting to note that petroleum firms have seen significant increases in their profit margins of late. For instance, Indian Oil Corporation and Oil India Limited recently announced 40.25% and 72.3% increases in profits, respectively.
The Centre is facing flak from all sides
The Centre has been facing flak over the increasing fuel prices, from both the public and the Opposition. Prices have continued to increase despite earlier assurances of a solution given by Union Petroleum and Natural Gas minister Dharmendra Pradhan. Opposition leaders like Trinamool Congress (TMC) MP Abhishek Banerjee are slated to hold protests today against the rising prices.
The options before the Central government are limited
Yet, for all the hullabaloo, the Centre's options are limited. The Centre has ignored Opposition calls to cut excise duty on fuel as it would endanger India's fiscal deficit target. The Centre levies excise duties of Rs. 19.48/litre on petrol, and Rs. 15.33/litre on diesel. For every Re. 1 cut in the central excise duty, the Central government will lose Rs. 10,725cr in revenue.
