Fuel prices remain unchanged on Wednesday

Fuel prices remain unchanged on Wednesday

Thiruvananthapuram:  Oil marketing companies on Wednesday gave momentary relief to consumers from skyrocketing fuel prices by keeping the retail price of petrol and diesel unchanged.

Though the Indian Oil Corporation (IOC) on Tuesday evening announced a price hike of 28 paise a litre for petrol and 25 paise for diesel, it reversed the decision on Wednesday.

In Kochi, petrol is sekking at Rs 91.20 per litre and dieselat Rs 85.73 on Wednesday.

Elsewhere in the country as well, fuel prices remained unchanged after oil companies increased its pump prices for the 13th time in the last 16 days. On Tuesday, petrol and diesel prices were raised by 35 paise per litre each.

The price pause on Wednesday may be momentary as global oil prices are on the boil with benchmark Brent crude prices remaining above $ 65 a barrel. The product prices in the international market have also firmed up over restricted supplies and a demand pick up. 

Prices go up by over Rs 7 since the New Year Day

Petrol prices have so far gone up by Rs 4.63 per litre in February and by Rs 7.22 in the first two months of year 2021. Diesel rates have gone up by Rs 4.84 a litre in February alone and by Rs 7.45 since the beginning of this year.

Petrol price has already surged past the Rs 100-mark in some places in Rajasthan and Madhya Pradesh, which levy the highest value-added tax (VAT) on the fuel.

Retail pump prices differ from state to state depending on the local taxes (VAT) and freight rates.

Central and state taxes make up for 60 per cent of the retail selling price of petrol and over 54 per cent of diesel.

Price softening attempts

In view of the sharp increase in fuel prices, a few states have introduced tax relaxation on petrol and diesel prices. These states include West Bengal, Rajasthan, Assam, and Meghalaya.

When Congress-led Rajasthan government reduced 2% state levy on fuels, the TMC government in West Bengal announced a reduction of tax by Re 1 per litre on petrol and diesel on Monday.

Assam, which will also go to polls this year, reduced tax on petrol and diesel price, thus lowering the fuel rates by Rs 5 per litre. The BJP government in Assam reduced the price just after the vote on account.

But it was the Meghalaya government that introduced the biggest relief on petrol and diesel prices yet. It reduced petrol and diesel prices by Rs 7.40 and Rs 7.10 per litre respectively by lowering the VAT on fuel to 20 per cent from 31.62 per cent.

Kerala won't reduce tax, blames Centre

Meanwhile, a price relief is unlikely in Kerala as Finance Minister Thomas Isaac had said a few days ago that the government would not reduce the levy on fuels and demanded the Central government to bring down the tax on fuel.

Isaac had reasoned his government has not augmented taxes on fuel. "The Centre had increased the excise duty on petrol and diesel. So they are responsible for the hike in prices," he said.

"The state is going through severe financial crisis. So it is not possible for the government reduce the tax now," Isaac had stated referring to the soaring fuel prices.

(With PTI inputs)

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