Oil marketing companies on Monday cut petrol price for the fifth straight day. According to Indian Oil website, petrol prices were cut by 10 paise per litre in Delhi, Chennai, and Kolkata while in Mumbai it was lowered by 14 paise. Petrol retailed at 75.69 per litre in Delhi, 78.37 in Kolkata, 83.3 in Mumbai, 78.55 in Chennai and 76.91 in Bengaluru. Domestic fuel prices are largely determined by global crude oil rates and rupee-dollar exchange rate.

On the other hand, on Monday, diesel prices were also lowered in metro cities. In Delhi and Kolkata, diesel rates were lowered by 6 paise per litre while in Mumbai, it was cut by 10 paise and in Chennai by 7 paise according to Indian Oil. It was the third straight day of reduction in diesel prices in metros. In Bengaluru, diesel was sold at 68.45 per litre on Monday.

On Monday, global crude prices gave up some of their hefty gains registered on Friday. International benchmark Brent fell 2%, to $74.08 per barrel, paring more than a half of their gains made on Friday.Oil prices on Friday surged above $75 per barrel after OPEC (Organization of the Petroleum Exporting Countries)decided on only modest increases in crude production.Foram Parekh, analyst at Indiabulls Ventures, expects Brent crude to hover around $75 per barrel in the short term.

Domestic petrol and diesel prices are revised every day at 6am by oil marketing companies. Apart from global oil rates, taxes both at the central and state level determine the final price what consumers pay at the pump. The central government had raised excise duty on petrol by 11.77 a litre and that on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 to shore up finances as global oil prices fell. But it cut the excise duty just once in October last year by 2 a litre. . The central excise is a fixed levy and does not change with changes in prices

But states levy VAT or value added tax on petro goods, which is ad valorem taxes in nature. This means if oil prices go up, states will earn more.

GST subsumed more than a dozen central and state levies like excise duty, service tax and VAT when it was implemented from July 1, 2017. However, its implementation on five petro products—petrol, diesel, natural gas, crude oil and ATF—was deferred.

(With Agency Inputs)