US President Donald Trump has already threatened that "anyone doing business with Iran will not be doing business with the United States", and its allies like India, which are a huge importers of Iranian oil, could face a tough challenge in meeting the supply demand. There is a pressure on oil prices due to a decrease in production.
The department's decision comes after the Minister of Energy, Jeff Radebe, told the portfolio committee on energy in August that there is no "quick fix" to the high fuel prices and it will require "multi-dimensional efforts". OPEC had said to increase the production of oil by one million barrel per day but it has been two months (July and August) but they have not done this so far. While Mumbai has the highest VAT (Value Added Tax) of 39.12 per cent on petrol. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.
This follows a 31 paise/litre hike in prices on Monday.
It is changed every month on the first Wednesday of the month.
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Petrol and diesel prices in the country have touched their highest levels on Monday. The country recently introduced the monthly pricing formula to compensate the prices as per the global crude oil price variation. On the other hand, the diesel is priced at Rs 74.41 per litre in Chennai and Rs 73.27 per litre in Kolkata. Just like India, the Nepali rupee, which is pegged with India's currency, is also not performing well against the dollar.
The rupee was trading at Rs 70.83 against the USA dollar in opening trade on Monday. In Chennai, petrol costs Rs 82.24 while it is Rs 82.06 in Kolkata.
The prices of CNG and piped natural gas (PNG) were also hiked in metro cities since the price of gas procured by city distributors is mostly dollar-denominated.
Like other European countries, the United Kingdom imposes a huge tax on commercial fuel, which makes up for over 70 per cent of the cost of a gallon of gasoline. In Mumbai, it rose from Rs 75.12 to Rs 75.54 per litre.