The US hurricane led petrol and diesel price hike to come under control soon – ZMR Blog
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The US hurricane led petrol and diesel price hike to come under control soon

The US hurricane led petrol and diesel price hike to come under control soon

The recent rise in the price of petrol and diesel is due to the rise in crude oil prices in the international market and hurricane calamity in the US. Apart from this, fuel costs are also expensive on petroleum products with higher VAT rates. Experts of petroleum sector affirmed.

Experts also said that with the stability in the international market, prices are expected to come down. According to experts, the price of crude oil in the international market has been in the range of 50 to 55 Dollars/barrel for some time now, which is lower than the normal level of crude oil. The real reason behind the rise in petrol and diesel prices during the last one-and-a-half month is the US storm. It is notable that in the second fortnight of August, Hurricane Irma in Houston, Texas caused a huge catastrophe, followed by Florida in the first fortnight of September.

Indian Oil Corporation’s former Chairman R.S. Butola said, “America’s refinery production has stalled due to storm in the US.The production capacity of the US is 2 Million barrels per day. And other than that they also export petroleum product for domestic consumption. Due to the hurricane, 3 to 4 million tones of production capacity was affected. With this, the free-on-board (FOB) price of petrol, which was running at $ 1.44/Gallon in June, increased to $1.62 in August and after the storm arrival in September it increased to $1.83/Gallon for export.”

petrol diesel

According to Butola, this price in petrol, diesel is temporary. As the production in the US refineries is normal, it is expected that in the international market, the price of petrol, diesel will be reduced and it will also have a significant impact in India. According to experts, the excise duty and the high VAT rates in the states also contribute in the rise of petroleum products.

The result of high VAT rates is that the price of petrol in Mumbai is Rs 79.53/Liter as on September 23, while the retail price of diesel is Rs 62.35 /Liter. In Delhi, VAT rates are lower than Maharashtra, so the cost of petrol in Delhi at present is Rs 70.42/Liter and diesel price is Rs 58.69 /Liter.

According to available data, currently, petrol is charged Rs 21.48/Liter while in Delhi the VAT is charged by 27%. Similarly, the Central Government levies the excise duty of Rs 17.33/Liter on diesel, whereas, in Delhi, VAT is charged at 16.75% including the dealer commission. The rate of VAT varies state to state.

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