The price of petrol and diesel have been raised almost by Rs.10 since the beginning of new financial year till date. The price of one litre petrol is now Rs.80.38 in Delhi and Rs.87.77 in Mumbai. The combination of increase in crude oil price and falling rupee are the major factors that lead to the price hike in petrol diesel prices.
Another major reason for price hike in petrol diesel prices is excessive taxes and imposition of excise duty. As the retail selling price of the two fuels is largely depends upon central and state taxes.
The Centre recently imposes a total of Rs.19.48 per litre of excise duty on petrol and Rs.15.33 per litre on diesel.
The former Finance Minister P Chidambaram said that the “Relentless rise in prices of petrol and diesel is not inevitable. Because the price is built up by excessive taxes on petrol and diesel. If taxes are cut, prices will decline significantly”.
The biggest impact of the ongoing US-China trade war which turned into currency war is on petrol and diesel prices. Due to this trade war the value of Indian Rupees fall down and weaker rupees raised import bills and resultantly petrol and diesel prices have also raised.