NEW DELHI: Yes gasoline price it hasn’t risen in more than a week, thanks to polls in five states. Public sector fuel retailers appeared to be calm on pump prices thanks to a “gentle push” from the Center, even as benchmark Brent crude surpassed $ 70 a barrel on Monday.
Pump prices have been unchanged for nine days, the longest gap between two revisions since January, despite the cost of Indian crude rising nearly 5% from $ 64 / barrel to $ 67 in line. with the strong rebound in crude oil.
There’s no denying that pump prices could still go up a bit in the 19 days before the polls start on March 27. But the situation is reminiscent of 2018.
Then fuel prices With a peak of 55 months before the Karnataka assembly elections, the government pressured state fuel retailers to keep the price line. They did it for 19 days from April 24 to May 13, starting to raise prices two days after the vote ended.
Technically, retailers are free to decide prices. But it is common knowledge that the oil ministry can, and does, influence such decisions.
In 2018, the top brass of the oil company had denied any government interference, saying that prices were frozen in “public interest.” This time, the executives simply declined to speak on the subject.
The Center’s concern about rising fuel prices is understandable, as it has emerged as a polling problem and has given the opposition a grip on the BJP.
The price of gasoline has crossed the psychological barrier of Rs 100 per liter in several cities and towns in Rajasthan and Madhya Pradesh, which have high VAT.
It is within walking distance of the Rs 100 mark in other cities, including Mumbai. Diesel sells for well above Rs 80 per liter across the country, increasing costs for farmers and transporters.
The government had pinned its hopes on a combination of oil producers boosting production and lowering winter demand to defuse the spike in prices. But those hopes have been dashed, and nearly all Wall Street banks have projected oil at $ 70 a barrel for the summer and $ 75 in the third quarter of the calendar year.
If that happens, it will increase pressure on the government to reduce excise duties, one of the key factors amplifying the impact of high oil prices. He has rebuffed the criticism by blaming previous governments and OPEC + production cuts.
The Center had cumulatively increased excise duties on gasoline by 13 rupees per liter and diesel by 16 rupees in two tranches on March 16 and May 5, when crude prices collapsed as demand evaporated. after Covid-19 shut down the economies.
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