Even as petrol and diesel prices were hiked, Chennai witnessed a record high on the price of petrol at Rs 76.48. According to The New Indian Express, this is the second highest price ever recorded in the city; the highest being Rs 76.93 in 2014. Diesel prices too hit an all time high at Rs 68.12. Petrol and diesel firms hiked prices by 19 paise per litre on Sunday through a notification.
The Economic Times notes a rising global demand as well as oil owners who wish to keep supply of crude oil restricted.
With a global rise in the price of oil, the Union government ignored calls for a slash in excise duties in the Union budget presented in February. According to DC, this makes India the most expensive South Asian country to buy petrol and diesel from even as half the price comprise taxes. Even as excise duty was cut by Rs 2 per litre in October last year, “global rally in crude prices pushed domestic fuel prices far higher than those levels,” the newspaper reports.
According to the Economic Times, the sharp recovery in crude oil prices is said to have increased India’s oil imports. As India is mostly dependent on imports for its oil needs, the 47 percent recovery in the price of crude oil has led to a 88 billion dollar import bill. According to the newspaper, rising petrol and diesel prices are trigger points for inflation.