Published: Wed, September 13, 2017
Health | By Jay Jacobs

Can't keep changing fuel prices on knee-jerk basis: Dharmendra Pradhan

Can't keep changing fuel prices on knee-jerk basis: Dharmendra Pradhan

"The government can not change fuel pricing on a knee-jerk basis", Pradhan told reporters here, noting that global crude oil prices had recently gone up as much as 15% owing to production being hit in the USA owing to the impact of multiple hurricanes.

"Daily revision in prices is good".

The petrol and diesel prices have gone through the roof ever since the central government announced daily revision of fuel prices.

Refuting the news reports of a possible government intervention to keep the retail fuel prices under check, Oil Minister Dharmendra Pradhan categorically said that the government has "no business to interfere in the day-to-day functioning of the oil marketing companies".

On June 6, the government launched the daily price change mechanism that saw petrol and diesel prices undergo revision everyday.

The spike in global crude oil prices is testing the government's resolve to continue on the path of complete deregulation of fuel as fiscal deficit restrain New Delhi from rolling back excise duties, while inflation inches up, according to a senior finance ministry official. In an advanced economy, the pricing of retail fuel is best left to a formula-driven transparent method, and not knee-jerk reactions, he added. Albeit, of late, the rise in the retail fuel prices was seen due the impact of hurricanes Harvey and Irma on the global fuel markets, Dharmendra Pradhan said, adding that the situation is likely to ease out in the coming days.

As a measure to make the price of petrol and diesel predictable, they will be brought under GST, the Minister said.

He further apprised that there is no plan to review the excise on petrol and diesel. That's why, benchmark price of petrol has risen 18% from $57.42 per barrel in June to $67.85 on September 8.

The two hurricanes to have hit the American shores in succession have hit the global refining capacity by as much as 13%, leading to a rise in the retail fuel prices in the worldwide markets, Dharmendra Pradhan said.

Similarly, petrol per litre cost Rs 70.38 in Delhi, Rs 73.12 in Kolkata and Rs 72.95 in Chennai while diesel price was Rs 58.72 in Delhi, Rs 61.37 in Kolkata, Rs 62.37 in Mumbai and Rs 61.84 in Chennai.

The excise duty hike resulted in the government's excise mop-up more than doubling to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. This suggests quite clearly that the government, not the consumer, has been the biggest beneficiary of lower crude oil prices since 2014.

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