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The price of petrol in Mumbai has hit Rs 81.69 a litre and diesel is now at an all-time high of Rs 68.89. Petrol prices are at a four-year high, on September 14, 2013, they had hit Rs 83.62 while diesel on that day was priced at Rs 58.86.
The cost of petrol currently is Rs 73.83 in New Delhi, Rs 76.54 in Kolkata, Rs 76.59 in Chennai and Rs 81.69 in Mumbai. And for diesel it is Rs 64.69 in New Delhi, Rs 67.38 in Kolkata, Rs 68.24 in Chennai and Rs 68.89 in Mumbai.
Even when Brent crude prices were at record low, the gain wasn’t passed down, thanks to high excise tax rates levied by state governments. From June 2017 onwards, there have been daily price revisions in the form of 10 to 20-paise hikes. Based on a PTI report, the country has the highest retail prices of petrol and diesel among South Asian nations. In India, taxes account for half of the retail rates and the current government has raised excise duty nine times between November 2014 and January 2016. It only cut excise tax once in October 2017, by Rs 2 per litre.
So, can they go down? There is scope to revise the high level of excise duty (charged by the Central government) and Value Added Tax (by state governments) but it’s something we can’t predict, since any reduction leads to a huge loss of revenue for the central and state governments.