Petrol, diesel prices steady for seventeenth consecutive day as state polls near

Petrol and diesel prices on Tuesday remained unchanged for the 17th consecutive day across India ahead of the state elections in several states such as Assam, West Bengal. Prices of both the auto fuels were last revised on 27th February 2021, when oil marketing companies increased the pricing of the petrol by 24 paise and diesel prices were hiked by 15 paise.

Currently, petrol in Mumbai is priced at ₹97.57 per litre, the highest in the country, while diesel is priced at ₹88.60 per litre. Petrol and diesel prices are fixed on the basis of the freight charges, local taxes and VAT. The central government levies excise duty on petrol and diesel, while the state governments levy VAT on auto fuels. Apart from that, both fuels attract dealer commission charges as well. All of these charges over and above the retail price of petrol and diesel form the final pump prices.

The central taxes and state government VAT in Delhi add 37% and 23% of the final price, while the dealer commission is around 3%. The freight charges and retail price of the fuel are the other components of the final pump price.

Due to the recent relentless hikes of petrol and diesel prices, the price of per litre petrol crossed ₹100 mark at places in Rajasthan, Maharashtra and Madhya Pradesh. In an attempt to reduce the burden from the common people, some state governments announced a tax cut from their shares. There have been demands to bring the petrol and diesel under GST ambit as well, as it would make the pricing of the auto fuels uniform across India.

Meanwhile, Minister of State for Finance Anurag Thakur on Monday said in Lok Sabha that both the centre and the states need to think about reducing taxes on petrol and diesel as their prices have increased sharply in the recent weeks. He also said that the central government is ready to discuss the issue of bringing petroleum products under the ambit of Goods and Services Tax (GST).