Petrol price in Mumbai jumps to all-time high, crosses Rs 86 per litre mark for first time

No one would have thought, that one day petrol prices will breach Rs 86 per litre mark in Mumbai. Well, the nightmare is very much here.  State-owned Oil Companies are in no mood to relax the price of petrol in various state capitals, especially in Mumbai as they have boldly boosted the rates of this fuel product to a record which has never been witnessed in the city. As on Monday, these OMCs have raised prices of petrol by 15 basis points per litre. This city has seen the biggest hikes compared to others, even after considering Maharashtra having trimmed Value Added Tax (VAT) in the state, which means the burden of hike should have been less in the city. OMCs take into account international crude oil prices, government's excise duty and state's Value Added Tax (VAT) for deriving the final retail price of petrol. 

In Mumbai, petrol price is available at Rs 86.08 per litre, higher by 15 paisa compared to previous day's price of Rs 85.93 per litre. 

The hike in Mumbai city was despite, U.S. oil futures hitting six-week lows on Monday on expectations major producers may ease output curbs, while Asian stocks and U.S. share futures gained on signs the United States and North Korea were still working towards holding a summit.

Therefore, Brent crude futures fell as much as 2.6% to $74.49 per barrel, their lowest level in about three weeks. They last stood at $75.00, down 1.8 percent.
India gave up daily revision price in petrol since April 24, however, the scenario changed when Karnatak Poll outcome was revealed on May 14. 

From May 14 till date, petrol prices have increased by Rs 3.60 per litre in Mumbai. 

On June 16, 2017, when India turned to daily revision in fuel prices, petrol stood at Rs 76.70 per litre in Mumbai, and diesel was at Rs 59.90 per litre. 

But from that day till now, petrol has increased by Rs 9.38 per litre. 

So far, the current situation is this that, Brent crude oil has relaxed to near $74 per barrel, and the Indian government has ruled out any relief by easing excise duty.

Also, many states are reluctant in reduce the Value Added Tax and the rupee has been hovering near 68-mark against US benchmark dollar index.
OMCs cannot do anything about rising international crude oil prices. 

But in October 2017, the finance ministry had cut excise duty by Rs 2 per litre and even urged states to trim down VAT rates. 

The Maharashtra Cabinet followed the direction, and reduced VAT on petrol by Rs 2 per litre and diesel by Rs 1 per litre effective from midnight. 
Oil Minister Dharmendra Pradhan that time had mentioned that states must give further relief by reducing VAT by 5%.

Maharashtra levies 46.52% VAT (47.64% in Mumbai) on petrol, the highest in the country. Andhra Pradesh has 38.82% VAT on petrol while BJP- governed Madhya Pradesh levies 38.79% VAT on the fuel.

From the above, one could have expected relaxation in hike in Mumbai prices.