Published: Tue, September 04, 2018
Business | By Eloise Houston

Fuel prices to remain unchanged: Radebe

Fuel prices to remain unchanged: Radebe

On Wednesday fuel prices will increase by just 4.9c per litre, the department of energy announced on Monday. Diesel prices on the other hand have risen by ₹2.42 a litre during this period. In Mumbai petrol touched Rs 86.56 per litre while diesel increased to Rs 75.54 per litre, after a hike of Rs 0.44 per litre. In Chennai, petrol costs Rs 82.24 while it is Rs 82.06 in Kolkata. A litre of petrol costs maximum in Mumbai where it is available at Rs 86.56. "Where are we heading to?"

The fall in rupee could be attributed to the surge in global oil prices, with crude oil gaining United States dollars 7 a barrel in a fortnight driven by fears over US-China trade war and the US sanctions on Iran contracting supplies.

The already high fuel prices continue to surge for 10th straight day.

The prices of CNG and piped natural gas (PNG) were also hiked in metro cities since the price of gas procured by city distributors is mostly dollar-denominated. Saudi Arabia, which is world's second largest oil producer, too is contributing to keep the prices on an upward trend. In Delhi, Indraprastha Gas Ltd raised the prices of CNG by 63 paise per kg, costing Rs 42.60 per kg in Delhi and Rs 49.30 per kg in Noida, Greater Noida and Ghaziabad.

Unleaded petrol will also go up, and will climb to its highest value in three months.

Government's intervention is a once-off, and the step was taken "because South Africans have seen sustained increases for the past five months". Given the importance of diesel in the transport industry, this could be used as a policy instrument to contain the general inflationary impact of petroleum price hike.

There are two factors that influence the price of petrol, namely external and internal.

The petrol pump price is made up of a number of price elements and these can be divided into global and domestic elements.

Without a reduction in petroleum taxes, which can complicate an already strained fiscal situation, inflationary pressures from rising oil prices will be hard to douse, he added.

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