International crude oil price is on a rallying streak hovering at around $70 a barrel as the demand is increasing whereas its production has been limited. The government last year began to price fuel in India at par with global crude oil price by following a dynamic pricing model that revises the price of diesel and petrol on a daily basis.
The price of diesel touched an all time high in many cities while petrol surged to three-year high levels and the trend is likely to continue as the brent crude oil is rising and is even expected to reach $80 per barrel. The government in the month of October last year had cut excise duty on retail fuel by Rs. 2 per litre but the steep rise in crude oil cost has stemmed most of the if not complete impact due to it.
In the national capital the price of petrol and diesel today is Rs. 71.39 and Rs. 62.06 per litre respectively which is higher in comparison to yesterday's price that stood at Rs 71.27 and 61.88 per litre for petrol and diesel respectively.
The price rise shall continue until and unless the government intervenes. Rising crude oil price is also causing a big blow to the country's import bill which has stood higher in the recent trade data and inflation.
And if the crude oil price touches $75 a barrel as per reports the government may again review the excise duty levied on retail fuel.
Will the price rise be steep for consumers?
As the retail fuel price is being revised on a daily basis with price hike of just few paise every day, consumers shall not be hit much by the rise in petrol and diesel prices as in the previous regime where sharp price revision was effected every forthnight.