Petrol prices in Kolkata and Chennai are Rs 82.22 per litre and Rs 82.41 per litre. At the Interbank Foreign Exchange, the local currency opened at a record low of 71.24 against a dollar, down from its previous close of 71.21, and weakened further to trade at a fresh low of 71.37, down 16 paise.
Also, crude oil has gained United States dollars 7 a barrel in a fortnight, driven by fears that the USA sanctions on Iran will likely contract supplies.
On Monday, Andhra Pradesh Chief Minister N Chandrababu Naidu said price of petrol would soon touch Rs 100 a litre as also the rupee against U.S. dollar.
On Wednesday morning petrol prices will increase by just 4.9c per litre to R15.49 at the coast and R16.08 inland. The price of petrol rose to Rs 86.56 a litre in Mumbai and Rs 79.15 per litre in Delhi on Monday.
With expectations of further tightening in oil prices due to a mix of factors such as declining inventories in the U.S., and Iran sanctions coming into place, the trend of rising petroleum prices is likely to continue.
Fuel rates have been on fire since the middle of August, rising nearly every day due to a combination of a drop in the value of the rupee and rise in crude oil rates.
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In Mumbai, the Petrol at Rs 86.56/litre (increase by Rs 0.31/litre) and diesel at Rs 75.54/litre (increase by Rs 0.44/litre). Because the price is built up by excessive taxes on petrol and diesel. "Secondly, global currencies have weakened against the United States dollar". "This unsuccessful government should take some measures to curb the prices", Vohra said.
"The government can not disturb fiscal maths by cutting excise duty", he said.
The price of diesel, paraffin and LP gas will remain unchanged. The Centre now levies an excise duty of Rs 19.48 per litre on petrol and Rs 15.33 on diesel.
A higher fuel price brings risk of an increased inflation, which could ultimately result in the Reserve Bank of India (RBI) hiking key interest rates, which makes borrowing more expensive.
Fuel prices vary from state to state due to local levies. Delhi charges a Value-Added Tax of 27% on petrol and 17.24% on diesel. Diesel prices reached an all-time high on May 29 at Rs 73.79 in Mumbai, Rs 69.31 in Delhi, Rs 71.86 in Kolkata, and Rs 73.18 in Chennai.