Fuel price hike acts as cost-push factor, does impact inflation: RBI Governor Das

Prime News, National, Fuel, Finance, Mumbai, February 25:- The Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday (February 25) said the fuel price hike has a cost-push factor and there is a need for co-ordinated action between the Centre, states on reduction in taxes on fuel prices.

Das said the state and Central governments have revenue pressures but the fuel price hikes do have an impact on inflation. “We realise that states and Centre have their revenue pressures and require high sums of money to enable the country and people to come out COVID-19 stress. I am sure the state and Central government will take a positive decision in a coordinated manner,” Das said.

He was speaking at an event organised by Bombay Chamber of Commerce.

The petrol price on Tuesday neared the Rs 91 per litre mark in the national capital and diesel crossed Rs 81 a litre, as fuel prices were hiked again after a two-day pause. Petrol and diesel prices were raised by 35 paise per litre each, sending retail rates to an all-time high, according to a price notification of state-owned fuel retailers.

The increase pushed petrol price to Rs 90.93 a litre in Delhi and to Rs 97.34 in Mumbai. Diesel now comes for Rs 81.32 a litre in the national capital and for Rs 88.44 in Mumbai.

The increase follows a spurt in oil prices in the international market, on which India is dependent to meet its 85 percent of crude oil needs.

Brent oil crossed USD 66 a barrel on Tuesday as the US output was slow to return after a deep freeze in Texas shut production last week. Petrol prices have been raised by Rs 4.63 per litre in February and by Rs 7.22 in 2021. Diesel rates have gone up by Rs 4.84 a litre in February and by Rs 7.45 in 2021.

Petrol price has already surged past the Rs 100-mark in some places in Rajasthan and Madhya Pradesh, which levy the highest value-added tax (VAT) on fuel. Retail pump prices differ from state to state depending on the local taxes (VAT) and freight. (Inputs: Agencies, NGB)

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