The spike in crude prices to about $80 per barrel could put pressure on the Modi government to cut excise duty as state-owned oil firms increased petrol prices by 20 paise per litre and diesel by 25 paise.

Motorists in Calcutta have to pay Rs 101.87 for a litre of petrol and Rs 92.67 for a litre of diesel. This is the first price increase in petrol in more than two months and the fourth in case of diesel.

Brent was trading at $71.59 a barrel on September 1. This rise is on the back of supply concerns about Opec’s ability to meet the rising demand.

Goldman Sachs has raised its forecast for Brent prices to $90 per barrel from $80 by year-end. The forecast has been revised due to faster fuel demand recovery in the global economy. In case the price of crude does reach the level predicted by Goldman Sachs, the government will have to take a call on whether it wants to reduce the excise duty collected or continue to earn a higher amount in revenue to meet its fiscal targets.