Rise in fuel prices; industry wants Centre to fragment daily revision

 BENGALURU: Petroleum dealers and bulk buyer such as truckers and bus operators have saved their demand to abolish the system of daily price revision of motor fuels, two days after the Organisation of the Petroleum Marketing Countries (OPEC) decided to cut crude oil production globally.

OPEC’s Friday decision to decrease crude oil output by 1.2 million barrels per day is likely to burn a hole in customers’ pocket once again after a period of two months, during which prices of petrol and diesel declined steadily from their peak. The decision has left the Indian retail market on the edge as it was just recovering from expanding prices that hit businesses across sectors.

“It is certain from OPEC’s move that the prices can never be stable and we want the Centre to do away with the daily price revision system,” KM Basave Gowda, president of Federation of Akhila Karnataka Petroleum Traders said, adding that the association has sent representations to both the Centre and the state government.

M Prabhakar Reddy, chairman of All India Dealers Association, said while it is crucial to bring petrol and diesel under GST, if it is getting delayed, then the daily revision must be stopped till motor fuel is taxed under the new regime. “We’ve suggested to the Centre that price revision can be done once in 15 days till petrol and diesel are brought under GST,” Reddy added.

As crude oil prices in the global market started climbing up in the middle of 2018, fuel prices in India reached an all-time high on October 4. In Mumbai, petrol was sold at Rs 91.25 a litre and diesel at Rs 80.10, while it was Rs 84.59 and Rs 76.45 in Bengaluru.

Later, when crude oil prices tossed down from $86 to $62 (October), fuel prices too plunged. On December 9, petrol was sold at Rs 71.14 and diesel at Rs 65.47 in Bengaluru.
Now, due to the Opec’s move, the prices may go up in the New Year. “We expect the price to increase somewhere between Rs 5 and Rs 10 as crude oil prices are expected to hover around $70 in the coming days,” said GV Krishna, independent director of Hindustan Petroleum Company Limited (HPCL).