Diesel costlier than petrol in Delhi for first time in history

NEW DELHI: Diesel price for the first time in living memory crossed the rate of petrol in the national Capital on Wednesday when prices were raised for a record 18th day in a row. According to a price notification of state oil marketing companies, petrol price was unchanged after 17 consecutive increases, while diesel rates were increased by 48 paise per litre across the country.

Diesel now costs Rs 79.88 per litre in Delhi as compared to petrol price of Rs 79.76 a litre.

Rates differ from state to state depending on the incidence of VAT.

However, diesel is costlier than petrol only in the national capital where the state government had raised local sales tax or VAT on the fuel sharply last month. Petrol costs Rs 86.54 a litre in Mumbai and diesel is priced at Rs 78.22. In Chennai, a litre of petrol comes for Rs 83.04 and diesel for Rs 77.17. In Kolkata, petrol is priced at Rs 81.45 per litre and diesel costs Rs 75.06. In Bengaluru, petrol comes for Rs 82.35 a litre and diesel for Rs 75.96. In Hyderabad, petrol is priced at Rs 82.79 a litre and diesel at Rs 78.06.

Traditionally, diesel was priced Rs 18-20 a litre lower than petrol due to lesser taxation. But over the years, the taxes have increased, narrowing

the gap.

The Delhi government had on May 5 hiked Value Added Tax (VAT) on diesel from 16.75 per cent to 30 per cent and on petrol from 27 per cent to 30 per cent. Since the levy is ad valorem, the actual incidence has gone up every single time oil companies raised retail selling price in the last 18 day. The 18th daily increase in rates since oil companies on June 7 restarted revising prices in line with costs after ending an 82-day hiatus in rate revision, has taken diesel prices to fresh highs. In 18 days, the diesel price has gone up by Rs 10.49 per litre. Petrol price had risen in the past 17 days by Rs 8.5 a litre.

The increase in rates since June 7 is the highest in any fortnight. When petrol and diesel pricing was deregulated in April 2002, oil companies revised rates every fortnight in line with the cost. They switched to daily price revision in May 2017 to allow cost to reflect instantaneously in retail rates.

According to pricing data, the maximum rates have increased in any fortnight was Rs 4-5 per litre.