Oil ministry gives in-principle nod to launch petrol, diesel futures: ICEX

Petrol prices go up every single day at store chains as more than 8p per litre is added to average pump prices in the past two months

In line with petrol, diesel prices also increased - to Rs 69.17 per litre in Delhi and Rs 73.64 per litre in Mumbai.

It comes as prices at the pumps have already surged to a three-year high.

Fuel prices continue to touch another peak for the 16th consecutive day, with petrol being sold at Rs 78.43 per litre in Delhi and Rs 86.24 per litre in Mumbai. It is possible to cut up to Rs 25 per litre, but the government will not. The revised prices are applied at the fuel stations with effect from 6 am every day.

The government said it is likely to levy a "windfall tax", in the form of a cess, on companies like Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) for any revenue that they earn from prices crossing $70 a barrel.

Petrol prices across the four metros have been increased by over Rs 3 per litre in the past 16 days, leading to a political slugfest.

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Last week, after a weekly meeting of the Union Cabinet Law Minister Ravi Shankar Prasad had stated that the government is working on a long-term solution to address the volatility and frequent revisions in rates.

State-owned Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) were in April 2002 given freedom to revise rates of petrol and diesel on 1st and 16th of every month based on average rate of benchmark worldwide petroleum product prices and rupee-US dollar rates in the preceding fortnight.

On May 25, Road Transport and Highways Minister Nitin Gadkari had suggested that petrol and diesel should be brought under the Goods and Services Tax (GST) regime to curb the rise in price. In Bengaluru, one litre of petrol costs Rs 79.71.

The UPA government finally freed petrol price in June 2010 and the diesel rates were decontrolled by the current BJP government in November 2014. States charge value added tax that varies from state to state.

On the other hand, if the Centre cuts the excise by Re 1, the loss of revenue will be to the tune of Rs 10,725 crore for every Re 1 cut in central excise and the amount will become twice if it cuts the excise duty by Rs 2.

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