No going back on reforms, fuel price spike temporary: Dharmendra Pradhan

Faith Castro
September 13, 2017

"It is time that he passes of the benefit of 50 per cent reduction in global prices of crude oil to the common person and government stops looting people to fill up its coffers", he added.

"The daily price mechanism is transparent and will help consumer in long term", he said.

The government will not go back on reforms in the fuel retail market and the daily revision of petrol and diesel prices introduced from June 16 will continue, oil minister Dharmendra Pradhan said on Wednesday amid growing public clamour for a reduction in Central excise to arrest rising pump prices since July.

"The government has no business to interfere in pricing by oil companies.petrol, diesel prices are deregulated and market aligned", he added. The excise duty on petrol has gone up to Rs 21.48 today from Rs 9.48 in 2014 when Prime Minister Narendra Modi-led BJP government came to power.

The Indian basket of imported crude oils gained almost $3.50 a barrel during last week even as petrol prices in the country touched their highest levels since Prime Minister Narendra Modi assumed office three years ago, official data showed on Monday.

Tax on petrol and diesel makes up for around 50 per cent of the total fuel prices.

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Earlier in the day, the Congress slammed the Prime Minister Narendra Modi-led government over spike in petrol, diesel prices and urged the Centre to pass on the benefit of 50 per cent reduction in worldwide prices of crude oil to the common person.

The minister said that the deregulation of retail fuel prices, beginning with petrol in 2010, diesel in 2014, and then the shift to daily revision in June 2017, is a consumer-friendly approach, and in their best interests.

He claimed that hurricanes Harvey and Irma, which hit the United States over the past month, were responsible for the rise in fuel prices in India. The price of petrol in Delhi, for instance, has cumulatively increased by nearly Rs. 5 since the introduction of the daily pricing policy on June 16 this year.

Though global crude and product prices have been rising for some time, the recent spike has been stoked mainly by fears of product shortage in the wake of hurricanes Harvey and Irma knocking out 13% of United States refining capacity.

The benefits of the slump in global crude price is yet to trickle down to the consumers in the country. The government's excise duty collection, for instance, has more than doubled during the period 2014-17, from Rs. 99,184 crore to Rs. 2,42,691 crore.

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