Dynamic pricing shows no relief in fuel rates

Chennai: Petrol and diesel indispensable for daily life have now been costing more as the Central government’s dynamic fuel pricing system has ‘euphemistically’ increased fuel costs over the period of six months.

Petrol was priced at Rs 69.93 per litre in Chennai before the introduction of dynamic fuel pricing system on June 15. On Monday, petrol price was Rs 75.55 per litre, which is nearly 8 per cent hike. Diesel prices were at Rs 67.42 per litre, up from Rs 59.22 prior to the new pricing policy, a hike of nearly 14 per cent.

In dynamic fuel pricing, retail selling prices of petrol and diesel will be revised daily according to the international market price and other aspects. Prior to the new system, the state-run fuel retailers such as Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum had been revising the rates on 1st and 16th of every month.

Now, fuel retailers have been revising prices every day, there is also an allegation that the government is not passing down the benefits of price slumps in the international crude oil market, as it keeps increasing the excise duty nullifying the difference. It is also to be noted that petrol and diesel are not yet brought under GST regime.

According to a Chennai oil dealer, who preferred anonymity, the Central government had increased excise duty as many as nine times from 2014.“Whenever the price of crude oil decreases in the international market, the government customarily increases excise duty aiming to maintain the same retail price and earn more profits,” the dealer said.

He also added that the excise duty on one-litre diesel was at '3.46 on April 1, 2014, and now it has been increased to Rs 15.33. “During the same period, excise duty on one-litre petrol has increased from Rs 9.48 to Rs 19.48,” he said.

However, some motorists remain unaware of the slow rise in petrol prices. “We always buy fuel for the rounded amount of Rs 50, Rs 100 or Rs 200. So we have missed keeping track of the rate hikes. Earlier, whenever the government revises the prices, we could able to know from media reports. But now we are in dark,” S. Raja Bharathi of Velachery, said.