New Delhi: Amid the Narendra Modi government being targeted by the opposition over the skyrocketing fuel prices, Union Petroleum and Natural Gas Minister Dharmendra Pradhan on Saturday attributed the spike in price to international factors, including the depreciation of the Indian rupee against the US dollar.
“Today Indian currency is stronger as ever, in comparison to all other currencies. But how do we purchase oil? Through Dollars. Today Dollar is, in a way, world’s biggest exchange currency. That is creating problem for us,” Pradhan told journalists on Saturday.
“Finance Ministry has already clarified this issue. Due to two major external factors, this unavoidable situation is there in market. American Dollar is creating a unique and unavoidable situation which is not good for world’s economy also,” he added.
The petroleum minister further said that the issues of Iran, Venezuela and Turkey are hindering the production of fuel, adding that these factors are “not in India’s hands”.
He asserted that the Organisation of Petroleum Exporting Countries (OPEC) has added to the problems, claiming that it assured additional production from July onwards, but has not reached the target.
Pradhan had Friday called for bringing petrol and diesel under the purview of GST. He said that Iran, Venezuela and Turkey – the three major oil-producing countries – had said that they would increase productivity but didn’t do so despite their promise.
Pradhan’s justification for fuel price hike comes on a day when petrol price crossed the Rs 80 mark in the national capital for the first time ever as rupee depreciation made imports costlier.
Petrol price was Saturday raised by 39 paise a litre and diesel by 44 paise per litre, according to price notification issued by state fuel retailers.
The increase pushed the petrol price in Delhi to Rs 80.38 per litre. Diesel rate touched its highest level of Rs 72.51 a litre.
In Mumbai, a litre of petrol costs Rs 87.77 and diesel comes for Rs 76.98, the notification said.
Fuel prices in Delhi are the cheapest among all metros and most state capitals due to lower taxes. Mumbai has the highest tax rates among the metros.
Opposition parties have called for a nation-wide ‘Bharat Bandh’ on Monday (September 10) to protest against the spiralling fuel prices.
The spike in prices has renewed calls for cut in excise duty but Finance Minister Arun Jaitley has remained non-committal, saying international oil prices are volatile and have not shown any linear movement.
Since mid-August, petrol price has risen by Rs 3.24 a litre and diesel by Rs 3.74 per litre as rupee hit record low against the US dollar, making imports costlier.
This is the biggest increase in rates in any fortnight since the daily price revision was introduced in mid-June last year.
The Central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
This led to its excise collections from petro goods more than doubling in the last four years — from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue from petro goods rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18.