Petrol and Diesel prices touch new highs in India, would lead to Inflation

Petrol and diesel prices kept spiraling even on Wednesday, touching new highs in the national capital and other metros.

Petrol was sold at Rs 72.43 per liter in Delhi, the highest in three years. It cost Rs 72.51 on August 2014, according to data from Indian Oil Corp.

In Kolkata, Mumbai, and Chennai, petrol was sold at Rs 75.13, Rs 80.30 and Rs 75.12 per liter respectively, also at over three-year high levels. The previous highs were Rs 75.46 (Kolkata, October 2014), Rs 80.60 (Mumbai, August 2014) and Rs 75.78 per liter (Chennai, August 2014).

Similarly, diesel prices, which have been touching new levels, shot up further on Wednesday across all major cities. In Delhi, diesel was sold Rs 63.38 per liter. In Kolkata, Mumbai, and Chennai, it cost Rs 66.04, Rs 67.50 and Rs 66.84 a liter respectively.

Diesel is widely used to transport goods including food products. Experts say this will push up inflation.

Related: Petrol price may rise in Delhi, diesel soon

Several factors like production curbs by the Organization of the Petroleum Exporting Countries and high demand have led to a surge in crude oil prices. As on January 24, the price of the Brent crude oil hovered around $70 a barrel.

Also, daily price revision in India allows for a rise in domestic fuel prices in accordance with international trends. The earlier system of price determination of petrol had a waiting period of 15 days.

On the other hand, the imposition of state taxes and levies generally hikes prices. Currently, the two fuels do not come under the ambit of the Goods and Services Tax.