Petrol and diesel prices were hiked for the second straight day on Friday after witnessing a downward trend for nearly a month. The rise in fuel prices was linked to hike in international crude oil prices following US sanctions on export of petroleum products by Iran.
While in Delhi and Mumbai petrol was at Rs 75.85 per litre and Rs 83.24 per litre respectively on July 6, in Kolkata and Chennai, petrol was at Rs 78.53 and Rs 78.72.
On the other hand, diesel was at Rs 67.66 per litre in Delhi and Rs 71.79 in Mumbai. In Kolkata and Chennai, diesel was available at Rs 70.21 and Rs 71.42 per litre respectively.
The three state-owned fuel retailers, IOC, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had not revised petrol and diesel prices since June 26 till July 5.
"We had not changed prices for a few days in anticipation OPEC decision to raise production leading to softening of international rates. But the 1 million barrels of additional production, which was to kick-in from July, has been overdone by the Iran issue," IOC Chairman Sanjiv Singh told PTI.
While the OPEC last month decided to raise production, the US is piling pressure on India, China, and other buyers to end all imports of Iranian oil by a November 4 deadline in a bid to choke the Persian Gulf state's economic lifeline with sanctions over its nuclear programme.
Singh said Iran produces around 2.3 to 2.5 million barrels per day and the world searching for alternates to replace those volumes has put pressure on the prices.
The decision to hold on to rates was taken without any elections looming around, he said, adding international prices have risen post-OPEC decision and oil companies have to "adjust retail rates accordingly".
State-owned oil firms, who had in mid-June last year dumped 15-year practice of revising rates on 1st and 16th of every month in favour of daily price revisions.
In the preceding month, or so rates had been cut in line with dropping international rates. Prices had hit an all-time high of Rs 78.43 a litre for petrol and Rs 69.31 per litre for diesel on May 30.
That peak had triggered demands for a reduction in excise duty but the government had ruled out any immediate cut.
The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel.
Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.
(With inputs from PTI)