06/05/2021, 12.27
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Mumbai: petrol over 100 rupees, 18 price hikes in one month

Fuel prices in India hit record highs after being blocked for local elections in March and April. Tax burden rises to 60% of distribution price. Concern over effects on small businesses in a country already on its knees due to the pandemic.


Mumbai (AsiaNews) -  Mumbai and in some other districts of India, the price of gasoline this week exceeded the threshold of 100 rupees per liter for the first time (almost $ 1.40, double the price currently charged in New York). And this is yet another record in a race that since May 4 - just as the country is dealing with the serious consequences of the new wave of the pandemic - has already seen 18 consecutive increases in fuel prices.

Large state-controlled companies (Indian Oil Corporation, Bharat Petroleum, Hindustan Petroleum) determine the prices charged at the filling stations in India. It is no coincidence that the increase in fuel prices - which has now lasted for two years -  was stationary in the months of March and April, in conjunction with local elections in some populous states such as West Bengal, only to resume at a faster pace once the voting operations are over.

 In Mumbai yesterday, gasoline reached 100.98 rupees per liter, while diesel oil has now reached 92.99 rupees per liter. The price is still slightly lower in Delhi (94.76 rupees for petrol, 85.66 for diesel), but there are also areas of Rajasthan where the cost of petrol has exceeded 105 rupees per liter.

Companies attribute these increases to developments in crude oil prices on international markets, but fuel taxation has also had an important effect. Today it is estimated that central government excise and local taxes together account for 60% of the consumer price of gasoline and diesel in India.

The Modi government had significantly raised the levy when - a few years ago - market prices had fallen compared to the period in which oil was trading at over $ 100 a barrel. In recent months, however, just as fuel consumption in India was falling due to the pandemic, taxes have been raised further to keep tax revenues high. And the result is record prices these days.

The fear now is that the increase in gasoline may further aggravate the economic crisis that India is bringing with the pandemic. The effects could be felt in particular on agriculture and on small taxi-rickshaw activities already heavily penalized in the cities by the lockdowns imposed to contain the pandemic.

Already a few months ago, even before India was hit by the second wave of Covid-19, the Pew Research Center had already estimated the presence of 75 million new poor caused by the pandemic in the country in 2020, with the middle class decreasing by a third.

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