Name: The Oil Price Hike Reasons & Excuses Explained | CNBC TV18
Uploaded: 2020-03-14T09:30:04.000Z
Duration: 6 min 14 s
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Increasing the prices of petrol and diesel has given some rice too pertinent questions.

For example, with the Indian crude basket currently at around $72 a barrel, why other prices higher than when the India basket wasn't nearly $112 a barrel in 2011 to 2012?

Pressure is here to put the numbers in perspective pressure where the prices stand now compared.

Historically, you know, I've come back to, Ah, this table and this these numbers and how the numbers break up a couple of times over the last two were.

So let's do this again, essentially because what we pay at the pump for petrol and diesel are at record highs.

And this even as crude oil prices are nowhere near their record highs, I mean, we passed $80 which is, I mean, a higher cyclical high.

You can call it that, but nowhere near all time high.

You look at the thing to focus on this row number three and four x ice, which is essentially what the government collects.

33 33% Leader This used to be three and 1/2 rupees a litre when a diesel prices in Delhi were ₹59 a litre.

I mean, this was in October 2014 back then at ₹59 a litre for diesel and Delhi oil.

International oil prices used to be $100 a battle.

Eso look at the stark difference You look at that that radium X isis steady across the country right where he stayed by state 16.75%.

It used to be about 7% or so So I mean even as international oil prices $20 lesser than I mean the point that I've taken which is October 2014.

What we paid the pump is at an all time high dealer commission is also gonna.

But that ideal acosta lastly fix it doesn't really fluctuate with international oil prices.

Let's look at patrol prices and how they're faring in Delhi for people at the pump is at a record 77 or dollars 77 or ₹8 a litre on again, The comparison is the last cyclical peak, which was about ₹76.10 a liter back in September of 2013.

Again, you look at international oil prices $80.

It was $108 a battle, then X ice from ₹10.

You look at that, which is what the state collects, 12.7%.

It's more than doubled to 27% of the other commissioners.

Also gonna purse Well, so I mean, you know, the And that's the reason why when you look at what the government is collecting, that has gone up.

Ah, and that's the That's the reason why the clamor that, well, you know you raised excises.

International oil prices were coming down.

You do not pass the benefits on, but now it's international prices are rising.

I mean, if you ask economists across the board, the Cleary sounding answer is no.

There is no fiscal headroom available, but even leave that aside.

You look at the micro's for oil marketing companies themselves to be able to make marketing margins what they were making pre Kartika elections when price hikes were stopped.

You know, we need a price increase off between four and ₹5.

I mean, we didn't interest of ₹45 we're talking about cut off between off whatever ₹2 whatever is being talked about, what the government can do.

The last car was the government affected was ₹2 late in 2017.

So I think, I mean, for all practical purposes, this is a pretty tough decision and that's the reason why we're saying, I mean, it's between a rock and a hard place between a rock and a hard place.

Pressure on now, prices of petrol and diesel are touching record highs on the back of surgeon crude prices.

One way to control the spiraling cost of fuel is to reduce excise duty that's levied by the center.

But government sources tell CNBC TV 18 that a reduction of even ₹1 per liter fuel takes a huge hit on the government's revenue.

Kitty Cepeda's joins us with the details on the fiscal impact on any possible reduction.

But the fiscal impact off any potential accessory cart on patrol and diesel will be quite enormous for the exchequer.

The numbers are more or less in public domain 13 or 1000 crores if they reduce the excited by ₹1 on petrol and diesel double that amount 46 or 1000 crores for the full financial year if it's a to be cut.

So having said that, the the question here now is that right at the beginning of the financial year is the government doesn't come and have that kind of appetite to, you know, kind of losing its purse strings and pass on some relief to the consumers in terms of the retail pricing, because you know that help cool that off.

The second question, of course, also would be that what would be the quantum of the excited beauty relief, if any.

If that comes about because, you know, probably a despondent time, even I do to be cut, it excites.

That could be a question mark on that front.

Anyway, this is a call that the government is still in the midst off you're taking a call on, so we just have to wait and watch.

Apart from this, you also understand that probably if there's anything bringing duties that will have to be on the basic excites.

You decide because that is all something.

The road says it's something that the government is unlike touch.

This is what we have been given to understand.

All right now, thank you so much for those details now ask fuel prices.

Such Petroleum Minister Dharmendra Pradhan has a short consumers of some relief soon talking to media and Bhubaneshwar today, the minister said.

And I quote, the center is sensitive towards the rising fuel prices.

I hope something will work out soon and court on.

There's more on fuel price surge, Sources tells CNBC TV.

Eating that the Petroleum Ministry has written to Finance Ministry GSD counsel on the Food Ministry asking for a reduction in GSD on ethanol now.

Currently, the GSC rate for it and all stands at 18%.

And in the past, Food Minister Ramblas past one has also called for a 5% tax rate.

Petroleum Ministry is also pushing for an increased blending of ethanol with patrol and diesel.

 Remember, oil marketing companies blend up to 21% ethanol with federal government wants this to go up to 10% now. 