After 18 days of constant increase in the price of diesel, the rate of the fuel has crossed that of petrol for the first time in Delhi. In the national capital, a litre of diesel now costs ₹79.88 as against the price of petrol at ₹79.76 a litre.
Government-owned oil marketing companies have increased the price of diesel by 48 paise a litre across the country, while the petrol price remained unchanged after 17 consecutive increases. However, diesel is costlier than petrol only in the national capital where the state government had raised local sales tax or VAT on the fuel sharply last month.
On May 5, the Delhi government increased the value-added tax (VAT) on diesel from 16.75 per cent to 30 per cent. It also hiked the VAT on petrol from 27 per cent to 30 per cent.
Petrol costs ₹86.54 a litre in Mumbai and diesel ₹78.22. In Chennai, petrol is priced at ₹83.04 and diesel at ₹77.17. In Kolkata, a litre of petrol costs ₹81.45 and diesel ₹75.06. In Bengaluru, petrol is sold at ₹82.35 a litre and diesel at ₹75.96. In Hyderabad, petrol is priced at ₹82.79 a litre and diesel at ₹78.06.
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Traditionally, diesel had been priced ₹18-20 a litre lower than petrol due to lesser taxation. But over the years, the taxes have increased, narrowing the gap. After an 82-day hiatus in the rate revision, oil companies began increasing the prices of fuels on June 7.
In the 18 days, the diesel price had gone up by ₹10.49 a litre, while the rate of petrol had risen in the last 17 days by ₹8.5. The increase in rates since June 7 is the highest in any fortnight. When petrol and diesel pricing was deregulated in April 2002, oil companies revised rates every fortnight in line with the cost.
They switched to daily price revision in May 2017 to allow cost to reflect instantaneously in retail rates. According to pricing data, the maximum rates have increased in any fortnight was ₹4-5 per litre. Prior to the current rally, the peak diesel rates had touched was on October 16, 2018, when prices had climbed to ₹75.69 per litre in Delhi.
The highest ever petrol price was on October 4, 2018, when rates soared to Rs 84 a litre in Delhi. When rates had peaked in October 2018, the government had cut excise duty on petrol and diesel by ₹1.50 per litre each. State-owned oil companies were asked to absorb another ₹1 a litre to help cut retail rates by ₹2.50 a litre.
Oil companies had quickly recouped the ₹1 and the government in July 2019 raised excise duty by ₹2 a litre. Taxes make up for nearly two-thirds of the retail selling price. As much as ₹50.69 per litre, or 64 per cent, in the petrol price, is due to taxes — ₹32.98 is the central excise duty and ₹17.71 is local sales tax or VAT. Over 63 per cent of the retail selling price of diesel is taxes.