New Delhi: According to a report, the average hike in the price of petrol has been 3.25% annually as opposed to a high 11.2% during the 10-year UPA rule. From Rs 37 in April 2005 to Rs 72 in 2014 there was a drastic increase in petrol prices under the UPA government. The prices rose from 72 to 80 under the NDA regime but has faced a downward trend from October 2018.

Petrol and diesel prices in India have followed the international crude oil trend since October 2018. High levels of taxation have made India one of the most expensive places in the world as far as petrol prices are concerned. Petrol prices were at an all-time high in September 2018, and one litre was being sold at Rs 80.87 in Delhi.

This price rise has been attributed mainly to the pact between The Organisation of the Petroleum Exporting Countries (OPEC) and its allies to limit global oil supply. The petrol prices are expected to rise considerably but remain below record levels as an unreasonable increase in prices may lead to a large scale reduction in demand.

In December, the OPEC led by Saudi Arabia and Russia decided to cut down 1.2 million barrels of supply per day from the global market for six months starting January 2019.

The value of the rupee against the dollar has slowly been increasing from October, and the price of petrol has also gone down considerably. The VAT imposed on petrol is such that an increase in petrol price will lead to a rise in tax.

The retail price of petrol and diesel is based mainly on the imports of crude oil. A further margin is added on the price by the oil marketing companies (OMCs). Excise duty, dealer commission and VAT charged by the respective states all make up the final price.

Maharashtra, Madhya Pradesh and Punjab charge the most taxes on a litre of petrol. Goa, Mizoram and Arunachal Pradesh charge the least VAT. Rajasthan, Andhra Pradesh and Bengal have imposed tax cuts as of September 2018.

As on March 26, a litre of petrol in Mumbai costs Rs 78.48, an overall rise of Rs 1.04 in March alone. Experts believe that changing the multi-level tax system to uniform GST would affect the revenue generated.