Petrol and diesel prices have skyrocketed recently. The petroleum minister even said that the fuel prices are problematic, but they cannot reduce them. However, now Goods and Services Tax Council better known as GST Council will be meeting in Lucknow and will be discussing how can they bring down the price of petrol and diesel. They can bring petrol and diesel under the GST regime which will help in lowering the price.
According to Livehindustan’s report, if the proposal is accepted petrol’s new price will be Rs. 75 per litre and the diesel will retail for Rs. 68 per litre. The proposal will be brought before the council for discussion and decision on September 17th. It was Kerala High Court that issued directions in June to consider petrol and diesel under GST.
As of now, petrol retails for Rs. 101.19 per litre whereas diesel costs Rs. 88.62 per litre. The main reason for the increase in fuel prices is tax. The central government applies 32 percent and the state government applies 23.07 percent. Whereas, on diesel central government takes 35 percent, while the state charges a tax of more than 14 percent.
It is not like the pandemic did not have an effect on crude oil prices. Throughout 2020, the prices of crude oil fell and still, the central government kept increasing the excise duty to increase their revenue. The State government did the same as because of the pandemic their revenue took a hit. The petroleum sector contributed ₹3,71,726 crore central excise revenue in 2020-21, and ₹2,02,937 crore state levies or value-added tax (VAT). We have earlier covered how the taxes on fuel works and how much tax do you pay on a litre of fuel. You can click here to read more about it.
Union Minister rules out price cut
Nirmala Sitharaman, Union Finance Minister said that there is no possibility to reduce the excise duty on the fuel prices. She blamed it on the payments in lieu of past subsided fuel prices by the previous governments. Congress was the previous ruling party in our country. According to the Union Minister, Congress did not pay the subsidy between the reduced retail price and the cost of fuel in the international market.
She said, “If I did not have the burden to service the oil bonds, I would have been in a position to reduce excise duty on fuel. Previous governments have made our job difficult by issuing oil bonds. Even if I want to do something I am paying through my nose for the oil bonds.”
Petroleum Minister said can’t bring fuel prices down
Dharmendra Pradhan, the Union petroleum minister said that he knows that the fuel prices are continuously increasing but they cannot bring them down. The reason stated behind this was that the government is saving money to spend on welfare schemes. He said, “I accept that current fuel prices are problematic for people but be it central/state government, over ₹35,000 crore have been being spent on vaccines in a year. In such dire times, we’re saving money to spend on welfare schemes,”