Petrol price hike: OMCs to bear the brunt?

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Petrol per litre on that day cost Rs 70.30 in Delhi, Rs 73.05 in Kolkata and Rs 72.87 in Chennai.

Meanwhile, due to the daily revision price policy, petrol in Mumbai on Wednesday cost Rs 79.48 a litre.

Minister of Petroleum & Natural Gas Dharmendra Pradhan today said the Government will adopt immediate measures to check the price of petroleum products.

"GST is the only way to have a rational price mechanism for petroleum products. the industry has been demanding it and Finance Minister Arun Jaitley (who heads the GST Council) is very interested to have it", Pradhan said, pointing to the substantial difference in prices between Delhi and Mumbai, for instance, on account of local taxes.

"The petrol and diesel prices are skyrocketing". Terming the criticism of a spike in rates as unfair, he said the drop in prices for over a fortnight after the daily price revision was introduced has been ignored and only the "temporary" phenomenon of a rising trend was being highlighted.

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Earlier in the day, the Congress slammed the Prime Minister Narendra Modi-led government over spike in petrol, diesel prices and urged the Centre to pass on the benefit of 50 per cent reduction in global prices of crude oil to the common person.

As global crude oil price crashed from almost $100 a barrel on January 1, 2014 to $50 a barrel in November 2014, it allowed oil companies to end their losses and also let the government hike excise duty through a special levy to shore up its finances.

Earlier, the state-run oil marketing companies used to review and revise retail fuel prices every fortnight on the basis of global crude oil prices, while the revision took effect from midnight. The recent price spike is expected to result in enormous gains for oil companies who while charging higher fuel prices also benefitted from lower crude rates as refinery shutdown in U.S. cut demand for crude oil.

Higher crude prices has been partly responsible for consumer price inflation accelerating at the fastest pace since March to 3.36% from a year earlier.

"The government will not reduce the excise duty any time soon as it has to meet the fiscal deficit target and its revenue collection from other sources is not improving greatly". "We have to fund massive highways and road development plans, railway modernisation and expansion, rural sanitation, drinking water, primary healthcare and education. Where do we get resources for these?"

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