A litre of petrol in Mumbai costs Rs?86.56 on Monday.
The government will not cut excise duty on petrol and diesel to cushion spiralling prices, which touched fresh highs Tuesday, as it has limited fiscal space available to take any dent in revenue collections, a top official said.
In Delhi, the petrol price has been risen to a record ₹79.
Falling value of rupee against dollar, as well as escalated crude oil price has inflated India's import bill as it is the largest imported commodity into the country.
On Monday, the key transportation fuel was sold at Rs 71.15, Rs 74, Rs 75.19 and Rs 75.54 per litre in Delhi, Kolkata, Chennai and Mumbai respectively, up from Rs the previous levels of Rs 70.76, Rs 73.61, Rs 74.77 and Rs 75.12 per litre.
The department of energy said it stepped in after South Africans had witnessed "sustained increases in fuel prices for the past few months, which placed a strain on the consumers".
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A litre of petrol in Mumbai costs Rs 86.72 while diesel is priced at Rs 75.74 per litre. "I would like to mention two points, and both these subjects are external".
The Congress party continued to attack the Central government demanding that petrol and diesel be brought under Goods and Services Tax (GST) immediately after the fuel prices saw a rise for the tenth consecutive day. Due to sanctions on Tehran from the US, India had to reduce its imports from Iran, subsequently reducing the total fuel availability in the country. "Secondly, global currencies have weakened against the United States dollar".
"As for the Rupee, it has depreciated by about 11 per cent against the United States dollar since the beginning of this calendar year owing to its sensitivity to crude oil prices and significant outflows of foreign investment".
This takes the worldwide price of crude oil and the value of the rand against the dollar into account.
"The government can not disturb fiscal maths by cutting excise duty", he said.
Also driven by higher oil prices and robust non-oil import demand, Moody's expects the current account deficit to widen to 2.5 per cent of GDP in the fiscal year ending March 2019, from 1.5 per cent in fiscal 2018.