T hose intending to buy a diesel-engine car primarily because diesel is a cheaper fuel than petrol, will have to rethink, at least in Delhi. In Delhi, the price of diesel per litre (Rs79.88) was higher than petrol (Rs79.76) last fortnight.
With the latest increase, the cost of petrol has risen by a cumulative of Rs9.41 per litre in Delhi and diesel by Rs9.58 per litre in 18 days (7 to 24 June). This is after the oil marketing companies had frozen the prices for nearly 83 days during the nationwide lockdown.
Earlier the difference between the cost of diesel and petrol was between Rs10 and Rs12, where diesel was always cheaper than petrol.
One of the main factors that has led to the hike in price is the surge in value-added tax (VAT) by the state government in May. The VAT on diesel was increased from 16.75 per cent to 30 per cent and on petrol from 27 per cent to 30 per cent. Besides VAT, there is also a component of transportation costs and dealer margins and marketing.
“Whatever price increase we are witnessing is because of international prices,” says Sanjiv Singh, chairman, Indian Oil Corporation Limited (IOCL).
At present over 66 per cent of the cost component of diesel in Delhi is due to Central and excise taxes. In April 2014, when the BJP-led NDA came to power, the cost of diesel was Rs55.49 per litre in Delhi and it is close to Rs80 now. India’s annual diesel consumption is 84 million tonnes approximately.
During the lockdown, the sale of petrol went down by 46 per cent and diesel by 54 per cent across India. However, there was an increase in demand for LPG by 21 per cent as people began to cook more at home.
hose intending to buy a diesel-engine car primarily because diesel is a cheaper fuel than petrol, will have to rethink, at least in Delhi. In Delhi, the price of diesel per litre (Rs79.88) was higher than petrol (Rs79.76) last fortnight.