Petrol, Diesel Prices Hiked After 2-Day Pause; 4 States Cut Fuel Taxes

On Tuesday, fuel prices in India rose to new all-time highs as state-owned oil marketing companies surged rates after keeping them unchanged for two days.

Petrol rates per litre increased to Rs 90.93 in New Delhi, Rs 91.12 in Kolkata, Rs 97.34 in Mumbai and Rs 92.90 in Chennai on 23 February.

Diesel rates per litre rose to Rs 81.32 in New Delhi, Rs 84.20 in Kolkata, Rs 88.44 in Mumbai and Rs 86.31 in Chennai.

Fuel prices were hiked for 12 straight days before keeping them unchanged on 21 and 22 February. These rates are revised on a daily basis by oil marketing companies in line with changes in the international prices and the rupee's exchange rate. However, the difference in prices across states is due to local, state and central government taxes on petrol and diesel. A large percentage, that is up to 60%, of the retail price on petrol or diesel price paid by consumers in the country is just a form of central, state or local tax.

Due to the continuous rise in rates since January, petrol and diesel prices have been breaching record highs across the country. In some parts of Maharashtra and Rajasthan, petrol price per litre has breached Rs 100 mark due to high local taxes.

The price hike has triggered protests by opposition parties in several states. Congress president Sonia Gandhi wrote to Prime Minister Narendra Modi, criticising his government for constantly hiking fuel rates.

Four states have taken the initiative of reducing the burden on consumers by lowering state-related taxes on fuel. Namely, the states of West Bengal, Rajasthan, Assam, and Meghalaya have announced a reduction in taxes in the last two weeks.