Petrol, diesel prices not revised in last six days: What's happening?

The prices of petrol and diesel in all metro cities have not changed since April 24. Today's petrol price in Delhi is Rs 74.63, in Kolkata Rs 77.32, in Mumbai Rs 82.48 and in Chennai Rs 77.43  per litre. These rates have remained constant in all four metro cities since Tuesday last week.

This is the second time petrol prices have not changed for almost a week after state-owned oil firms - Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation - last year decided to adopt a daily price revision. Earlier this month, oil companies did not revise their prices for four days: April 16-19.

India imports 80 per cent of its crude oil requirement, any increase in prices in the global market leads to an increase in the price of petrol and diesel back home. Petrol prices in different states in India vary because of the state tax.

What's surprising is that the crude oil prices have been constantly fluctuating and hovering around USD 74.50 in international market without any change reflecting in the prices in India. So, what's happening?

The government has made it clear in the past that it does not interfere in the operations of oil companies. "If at all, efficiency is the only area government will interfere to improve operational efficiency of oil companies," Oil Minister Dharmendra Pradhan recently said.

His statement came after a section of people wanted the government to reconsider the daily price revision in view of continuous rise in petrol and diesel prices.

Last year in June, oil companies dumped the decade-old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Pradhan justified the move, saying that the daily revision allows any fall in international oil rates to be passed on to consumers immediately rather than having to wait for 15 days as in the old system.

Not long ago, some reports had emerged that the government had directed the oil companies to defer the hike in petroleum prices ahead of elections in Karnataka. However, the Oil Minister had dismissed the reports, saying 'there is no such direction'. 

He said: "It is well planned strategy of government that oil companies are fixing the fuel prices on the basis of international oil prices. If we don't bring competitor in the long term, then there would be no solution. Government has given freedom to oil companies."

The petrol and diesel prices have been on rise despite the fall in global crude prices since their 2014 level. It happened because the Central government - between November 2014 and January 2016 - raised excise duty nine times to shore up finances.