Petrol, diesel prices touch record high: 10 points

 Petrol and diesel prices touched record high on Tuesday. On Monday, the prices were hiked after a 19-day pre-Karnataka poll hiatus, petrol price on Monday hiked by 17 paise a litre and diesel by 21 paise as PSU oil firms began passing on the spike witnessed in international rates to consumers.

1. On Tuesday, petrol price in New Delhi was at a fresh 56-month peak and the price of diesel has registered record high. The new prices came in at six in the morning. In New Delhi, the petrol was retailing at Rs 74.95 per litre in Delhi, Rs 77.65 per litre in Kolkata, Rs 82.79 per litre in Mumbai and Rs 77.77 per litre in Chennai, according to Indian Oil Corporation's official website. 

2. On diesel front, prices were at Rs 66.36 per litre, Rs 68.9 per litre, Rs 70.66 per litre and Rs 70.02 per litre respectively. Karnataka voted on Saturday for a new assembly and the results will be announced today. The picture would be cleared around lunch time. 

3. Analysts estimate the three OMCs - Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd - took a combined hit of over Rs 1,500-1,700 crore since the start of April, when the prices marginally higher despite a steep rise in international oil prices. The revisions were altogether stopped on April 25 due to polls in key southern state.

4. Industry experts now expect the OMCs to breathe a sigh of relief and try to recover losses by re-calibrating it with the international prices, although the rise is likely to be gradual. With the US reimposing sanctions on Iran, global oil prices are unlikely to come down any time soon.

5. The daily pricing of fuel was enforced by the government in June last year to align with the international oil prices and currency volatility.

"The OMCs which sustained all the losses due to it, will now certainly try to recover their losses by increasing the oil prices" said Madan Sabnavis, Chief Economist at CARE Ratings.

6. Oil Minister Dharmendra Pradhan had last month denied reports of a directive to state oil firms to absorb at least Re 1 a litre hike by not raising prices in line with cost.

7. The prices at petrol pumps of state-owned fuel retailers like Indian Oil Corp (IOC) were cut by 1-3 paise every day in the first fortnight of December 2017 before Gujarat went to polls.

8. Meanwhile, Senior Congress leader P Chidambaram on Monday slammed the government for hiking petrol and diesel prices, saying the recent "interval" was only due to the Karnataka elections which got over on Saturday. 

9. In separate tweets, Chidambaram also asked all chief ministers to oppose the terms of reference (ToR) of the 15th Finance Commission, which he said was the central government's "attempt to violate the Constitution and wreck the federal system".

"There we go again. More taxes on petrol and diesel, more burden on the consumer. The Karnataka election was only an interval," he tweeted.

10. Finance Secretary Hasmukh Adhia and Economic Affairs Secretary Subhash Garg have in the past weeks ruled out any immediate reduction in excise duty to cushion the increases warranted from a spike in international oil price.