International oil prices plunged to a 17-year low on Monday, but retail prices for gasoline and diesel in India remained frozen as oil companies continued to offset increases in excise duties imposed by the government.
Brent futures fell to around $ 23 per barrel – the lowest since November 2002, while US crude briefly fell below $ 20 as coronavirus blockages dried up demand while surplus crude oil increased.
Gasoline and diesel prices in India, however, remained frozen for the 14th day in a row. The rates were last revised on March 16 and since then, the oil companies continue to adjust the drop compared to the increase of 3 Rs per liter of excise duties on two fuels made by the government.
In Delhi, gasoline is priced at Rs 69.59 per liter while in Mumbai, it costs Rs 75.30. Diesel is priced at Rs 62.29 per liter in Delhi and Rs 65.21 in Mumbai.
The rise in excise taxes, which would give the government 39,000 crores rupees in additional revenue, could have pushed retail prices up by 3 rupees per liter, but the oil companies did not pass on the increase. Instead, they continued to adjust it to lower international crude prices.
A petrol pump closed during the Janata curfew, following the coronavirus pandemic, in Prayagraj on Sunday. photo: pti
Shortly after the excise tax hike, the government obtained parliamentary authority to increase excise duties on gasoline and diesel by 8 rupees per liter in the future.
After the tax increase of March 14, the total impact of excise duties on petrol rose to Rs 22.98 per liter and that on diesel at Rs 18.83.
The tax on gasoline was Rs 9.48 per liter when the Modi government took office in 2014 and that on diesel was Rs 3.56 per liter.
Between November 2014 and January 2016, the government led by the BJP raised excise duties on gasoline and diesel nine times to withdraw the gains resulting from the fall in world oil prices.
In total, the customs duty on petrol increased by 11.77 rupees per liter and that on diesel by 13.47 per liter during these 15 months, which allowed the government to speed up the sweeping of more than twice to reach 2.42,000 crore rupees in 2016-2017 against 99,000 rupees. crore in 2014-15.
It reduced excise duties by 2 rupees in October 2017 and 1.50 rupees a year later. However, it increased excise duties by 2 rupees per liter in July 2019.
The oil price war between Saudi Arabia and Russia, combined with the destruction of demand by the coronavirus pandemic, has resulted in lower international rates.
Globally, 100 million barrels of oil are normally consumed daily, but forecasters predict up to a quarter of that in just a few weeks.