Domestic petrol prices increased for the 13th day in a row on Saturday, with the fuel being sold at Rs 77.97 per litre in the national capital. In Mumbai, petrol price reached Rs 78.57 in May 2012 and again reached its peak at Rs 83.62 in September 2013. Diesel prices, which have already hit all-time highs, also rose around Rs 3 a litre during the period.
The petrol prices touched a new record in Mumbai and Chennai and rose to Rs 85.93 and Rs 81.11 per litre respectively, up from Rs 85.78 and Rs 80.95 per litre on Saturday.
This makes the 50-litre full refuel of a typical family auto £4 more expensive.
Worldwide crude oil prices had risen in the period, while the rupee fell against the United States dollar - both factors make the fuels costlier. The government is toying with both short and long-term solutions and has attributed the rise in prices to the political difference between Iran and Venezuela, the two oil producing countries. The oil marketing companies were restrained from passing on the small hike in the price of LPG to the consumers.
As per the pricing mechanism, the domestic petrol prices are dependent upon the worldwide fuel price on a 15-day average.
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However, Pradhan doesn't see this as a potential solution as the central government had reduced the excise duty on fuel by Rs. 2 per litre only recently in the wake of poor. No doubt, a sharp rise in global oil prices is the biggest headwind facing the Indian economy today.
Union Minister Nitin Gadkari had said that subsidising petrol and diesel to bring down their retail prices will take money away from government's social welfare schemes. In other words, it pocketed the gains of low crude prices while transferring the pain of high crude prices to the consumers.
"When crude prices were falling from November 2014, the repeated increase of duty was a strategic error of the government".
When the Modi Government came to power in April 2016, the crude oil was trading at $107.