Fuel prices hit all-time high, petrol Rs 86.56 per litre in Mumbai

Randal Sanchez
September 4, 2018

Expressing his views on Twitter, he wrote, "Petrol, diesel and gas prices are rising and are hitting all-time highs daily".

With imports becoming costlier because of a free-fall in rupee against the USA dollar, the government believes the current account deficit will overshoot the target and it can not "disturb fiscal maths by cutting excise duty on petrol and diesel", the official, who wished not to be identified, said.

Petrol and diesel prices in Delhi have increased by 13% and 19% this calendar year so far.

The prices of CNG and piped natural gas (PNG) were also hiked in metro cities since the price of gas procured by city distributors is mostly dollar-denominated.

In a surprise announcement from minister of energy Jeff Radebe on Monday afternoon, fuel prices will remain unchanged for September, except for a 4.9 cents per litre increase in the retail margin of petrol to cater for the annual salary increase for forecourt attendants, cashiers and other admin staff.

Falling value of rupee against dollar, as well as escalated crude oil price has inflated India's import bill as it is the largest imported commodity into the country.

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The recent slump in the rupee also has lifted the import cost of crude oil, subsequently raising fuel prices.

External factors: The exchange rate - that is the price of the dollar vs the rand.

Last week, credit rating agency Moody's Investors Service said there are risks of India breaching the 3.3 per cent fiscal deficit target for the current financial year ending March 31, 2019, as higher oil prices will add to short-term fiscal pressures.

Senior Congress leader P Chidambaram on Tuesday blamed the NDA government for rise in petrol and diesel prices, saying it was happening due to "excessive taxes". "I would like to mention two points, and both these subjects are external".

In Chennai, petrol price went up by 17 paise to Rs 82.41 a litre while diesel cost Rs 75.39. "Apart from that, crises in countries like Venezuela and Iran are increasing".

The fuel prices are likely to go up further as the rupee hit yet another all-time low of ₹71.18 against the US dollar on Monday, compared to the previous close of ₹70. "Secondly, global currencies have weakened against the United States dollar", Pradhan had said in Surat.

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