After fuel prices had crossed the Rs 90 mark in many cities around India, state and central governments had reduced taxes.
Over the past month we have seen the fuel prices rocket all over the country. In the month of September the price of petrol in Mumbai peaked at Rs 90.86, a hike of Rs 4.77 in that month alone.
In order to provide some context to these numbers, the average fluctuation in petrol prices over the last five months has been Rs 2.14 and the cost of petrol had at no point crossed the Rs 90 mark in this financial year until September. The situation with diesel prices is quite similar. The price of diesel peaked at Rs 79.40 per litre in the month of September, which is a Rs 4.64 increase over the course of the month. As with petrol prices, diesel rates on average have only fluctuated Rs 2 and at no point did the prices cross the Rs 75 mark in this financial year, before September. Prices haven’t reduced much since September, despite preventative measures taken by the central and some state governments.
Earlier this month on October 5, the Central government reduced fuel prices by Rs 2.50 by decreasing excise duty on both petrol and diesel by Rs.1.50 and asking oil PSU’s to further subsidise prices by Rs 1. Some state governments also reduced VAT by Rs 2.50. This provided some much needed relief by dropping petrol and diesel prices by Rs 5, though this relief didn’t last very long as prices quickly climbed back up by Rs 2 over the following 10 days.
However, state governments provided more relief by reducing VAT further. Over the last six days, prices of petrol in Mumbai dropped from Rs 88.29 to Rs 86.81 – a Rs 1.48 decline. Diesel has experienced a decline in the last week as well, with the prices in Mumbai falling from Rs 79.38 to Rs 78.46 as on October 23, 2018 – a Rs 0.92 drop.
Further reductions in the fuel prices have come as a result of a decline in global crude oil prices over the last week.