On Thursday, the upward revision on fuel prices was resumed by government-owned oil marketing companies after a day's break.
In Delhi, however, diesel price was increased for the 19th consecutive day by 14 paise on 25 June to Rs 80.02 per litre after a 48 paise hike on the previous day. The fuel largely used by transporters has not only crossed the Rs 80/litre mark for the first time ever and is now costlier than petrol in the state, which was hiked to Rs 79.92 per litre on Thursday.
Since 7 June, after an 82-day pause in the daily revision of fuel prices, state-owned marketing companies have increased diesel price in Delhi by Rs 10.63 a litre.
On 25 June, in other metro cities of India, petrol prices per litre were raised to Rs 86.70 in Mumbai, Rs 83.18 in Chennai, Rs 82.52 in Bengaluru and Rs 81.61 in Kolkata. As for diesel prices per litre, they were priced at Rs 78.34 in Mumbai, Rs 77.29 in Chennai, Rs 76.09 in Bengaluru and Rs 75.18 in Kolkata.
Experts say that while in the international market, diesel is slightly costlier than petrol due to higher cost of production, in India, tax on diesel have been kept lower than petrol since the fuel is primarily used by transporters and farmers. While this continues to be the case in most states, the gap between petrol and diesel prices is narrowing.
Now, among metros, Mumbai continues to be the costliest petrol, but diesel is now the costliest in Delhi. However, diesel price in Jaipur has crossed the Rs 81/litre mark and petrol costs more than Rs 87 per litre
These difference in prices is due to the state and central government taxes imposed on fuel.
On 4 May, amid falling revenues due to the coronavirus pandemic, Delhi government had increased VAT on both the fuels to 30 percent. For diesel, it was an increase from 16.75 percent earlier causing an increase of Rs 7.10 per litre, which is much higher than the impact on petrol that was imposed with a state VAT of 27 percent earlier, increasing its rate by Rs 1.67 a litre.
Additionally, the central government had increased the excise duty on per litre of petrol by Rs 10 and per litre of diesel by Rs 13.
Consequentially, around 70 percent of the retail price of fuel you pay now is just some form of tax.