Finance Ministry mulling tax cut on petrol, diesel to give relief to consumers
Finance Ministry is considering cutting the excise duties on auto fuels like petrol and diesel to offset the impact of the record price hike. In the last ten months, the price of crude oil has increased to double the amount resulting in a record fuel price hike in India. While the price hike of crude oil is impacting the price of petrol and diesel in India, the high amount of state and central taxes are also playing a key role behind the upward rally.
The taxes and duties imposed by the central and state governments account for nearly 60% of the retail prices of petrol and diesel in India, which is the third biggest consumer of crude oil. Nearly 85% of India’s total crude oil consumption is imported. The current hike in the international market is impacting the price of auto fuels in the domestic market. In such a scenario, a tax cut from the central government would be a welcome move.
A couple of state governments have already announced a cut in state taxes in a bid to offer relief to the common people and motorists as well. However, the central government is yet to announce any such step.
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On Tuesday, the prices of petrol and diesel remained unchanged. The prices of both these fuels were last changed on Saturday when the petrol price was hiked by 24 paise per litre and diesel was raised by 15 paise per litre in Delhi. Currently, petrol and diesel prices in Delhi stand at ₹91.17 per litre and ₹81.47 per litre. On the other hand, the prices of petrol and diesel are ₹97.57 per litre and ₹88.60 per litre in Mumbai.
The Finance Ministry has started the discussion with some state governments, oil marketing companies and the oil ministry as well to decide the most effective way to lower the tax burden on the consumers without the revenue generation being hit. The aim of this tax cut is to keep the prices of fuels stable. A decision by the ministry is expected to be announced by mid-March.