Be ready for a surprise when you visit a petrol pump the next time. Thanks to the falling rupee-dollar exchange rate, petrol and diesel prices in the country are now at an all-time high. A litre of petrol in Mumbai now costs Rs 86.54, while diesel stands at Rs 79.15 per litre.

This is a hike of Rs 2 per litre for petrol and Rs 2.42 per litre on diesel. As mentioned earlier, this is mostly due to the fact that the dollar-rupee exchange rate has hit an all-time low of Rs 71.42. Due to the sanctions imposed on Tehran by the USA, India had to reduce its fuel import from Iran, which is the third biggest producer of the fossil fuel. This led to a hike in the crude oil prices by USD 7 per barrel overnight.

While fuel prices have risen by Rs 5 per litre in the last half of the year, the government hasn't reduced the excise duty, and the VAT now stands at Rs 10.12 per litre and Rs 16.42 per litre. And considering the fact that India imports almost 82 per cent of its fuel requirement, the fuel price hikes come as no surprise.

At this point, we can only urge the Government to decrease the VAT applied on fuel, at least temporarily, which might help in bringing down fuel costs. But then, this is the cost to pay when economic growth slows down.

Source: zigwheels.com