Fuel prices in India have continued to rise to new highs for the past few days. In Delhi, the city with the lowest VAT on petroleum products among metros crossed the Rs 80 per litre mark for the first time ever today. Petrol prices per litre were hiked to Rs 80.38 in the national capital, Rs 83.27 in Kolkata, Rs 87.77 in Mumbai and Rs 83.54 in Chennai.
Diesel prices were also raised considerably today. Per litre prices across metro cities were at Rs 72.51 in Delhi, Rs 75.36 in Kolkata, Rs 76.98 in Mumbai and Rs 76.64 in Chennai.
The two popular fuels have not seen a day of price fall since 15 August but no relief has been provided by the government on the heavy taxes imposed on these products that could reduce the burden on consumers. This is primarily because the state and union government funds a majority of its projects from the revenue received from these taxes.
State VAT (value added tax) being the price differentiating factor for the pricing across states is the lowest in Goa at 16 percent and the highest in Maharashtra (Mumbai, Thane and Navi Mumbai) at 39.5 percent. Petroleum products have not come under that tax system of GST (goods and service tax) yet.
Meanwhile, the rise in crude oil prices that started in August will soon make India's import bill larger and the current account deficit (CAD) that was reported at 2.4 percent of the GDP for the April-June quarter on Friday could widen to 2.6 percent. Apart from that, the added pressure of weakness in the rupee valuation could push the price of consumer goods higher in the coming months as manufacturers pass on the burden on to customers.