After elections in five states including West Bengal, oil companies may give a big blow, petrol may become costlier by Rs 18 and diesel by Rs 35.
New Delhi. Due to rising prices of crude oil, petrol may become costlier by Rs 18 and diesel by Rs 35 per liter. The report of foreign brokerage firm Macquarie states that despite crude oil being expensive, the prices of petrol and diesel in the country are stable. Companies are incurring losses due to this. In such a situation, after the elections are over in 5 states including West Bengal, companies can increase the prices.
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Due to expensive crude oil, companies are incurring a loss of Rs 18 per liter on petrol and Rs 35 on diesel. At the peak of last month, these three companies were facing losses of about Rs 2,400 crore every day. After the reduction of Rs 10 in excise duty, this loss has come down to Rs 1,600 crore. For every $10 rise, the loss increases by about Rs 6 per litre.
India imports 88 percent crude oil
India imports about 88 percent of its crude oil requirement. Of this, 45 percent comes from the Middle East and 35 percent from Russia. Rising crude oil prices are a threat not only to oil companies but also to the country’s current account deficit (CAD). It is estimated that this deficit may increase to $20 billion in the first quarter of 2026.
Excise duty reduced from 22% to 8% in 9 years
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The contribution of excise duty on oil to government revenue is continuously decreasing. It was 22 percent in fiscal year 2017, which has now come down to just 8 percent. Even if the government removes the entire excise duty, at current prices the losses of oil companies will not be completely eliminated.
Many countries including America increased the prices of petrol and diesel
Average gasoline prices in the US have reached above $4 per gallon for the first time since August 2022. At the same time, many neighboring countries including Pakistan, Nepal and Sri Lanka have also increased the prices of petrol and diesel.
How are petrol and diesel prices decided in India?
Till June 2010, the government used to set the price of petrol and it was changed every 15 days. After June 26, 2010, the government left the determination of petrol prices to the oil companies. Similarly, till October 2014, the price of diesel was also fixed by the government. From October 19, 2014, the government also handed over this work to the oil companies. Currently, oil companies decide the price of petrol and diesel daily keeping in mind the price of crude oil in the international market, exchange rate, tax, cost of transportation of petrol and diesel and many other things.
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