Fuel prices may come down by Diwali: Oil Minister

Cheryl Sanders
September 19, 2017

Central government, Cabinet Secretary, Union Finance minister, Petroleum Secretary, Odisha Chief Secretary and officials of three oil companies-BPCL, IOCL and HPCL have been made parties in the PIL. The continuous hike in petrol and diesel prices has affected the general public, alleged the petitioner and social activist Surendra Panigrahi of Third Lane in Brajanagar of Berhampur in Ganjam district.

Market watchers are saying that if government goes ahead with Pradhan's suggestion and include fuel prices under the ambit of GST, there will be a steep downfall in the prices. If we take out the excise duty per litre charged by the centre (Rs 21.48), 27 percent Value-Added Tax charged by the state government (calculated to be Rs 14.96), dealers commission (Rs 3.24), the actual cost of petrol come to be 30.85 per litre. Presently, petrol is priced at Rs 70.52 per litre whereas that of petrol is 58.85 per litre, in Delhi. While the same on diesel has been increased from Rs 3.65 per litre to Rs 17.33 per litre. If the government pushes petrol to highest GST tax bracket of 28 percent, then it will cost Rs 43.44 per litre in the national capital. In spite of the centre demanding the fuel prices to be brought under the purview of GST, the state government has refused to do so since it is a lucrative source. Another reason why states do not want petroleum products to shift under GST is that the levies on petrol and diesel are collected for them by the public sector oil companies and passed on directly to the states as a result of which there is no leakage due to corruption as is the case with other state taxes.

Union Minister for Petroleum and Natural Gas Dharmendra Pradhan on Friday said that petroleum products should also be included under the GST mechanism.

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