"India to take a 'long-term" view on fuel pricing - minister

Andrew Cummings
May 27, 2018

"Central government saves Rs 15 on every litre of petrol due to fall in crude oil prices". Since 2014, the Modi government has increased excise duty on petrol and diesel nine times and the total quantum of excise duty raised during this period was Rs 11.77 per litre on petrol and Rs 13.47 per litre on diesel. While the rise in fortune for the OMCs in the past four years was mainly on account of lower crude oil prices, the common man was left out from the party as the government had hiked tax levies on fuel on several occasions.

The HPCL Chairman and Managing Director Mukesh Kumar Surana said earlier that there is an immediate need to review the taxation on petrol and diesel to provide relief to consumers as the fuel price hike has become as a burn hole in the pocket of consumers.

"A task force is already working on reducing the fuel prices". It is likely that the government may ask Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation to freeze prices as a temporary arrangement.

"If the price of oil goes up towards $100 a barrel we will very likely see a return to the dark days of April 2012 when petrol and diesel hit record highs".

But the economic experts say that it is not possible.The Narendra Modi government has a fiscal deficit target of 3.2% for the fiscal year 2018-19.

The rise in crude prices can be contained, said Kaushik Madhavan, Director - Automotive & Transportation, MENASA at Frost & Sullivan.

The central government cut the excise duty by Rs 2 per litre in October 2017, when petrol reached Rs 70.88 per litre in Delhi and diesel Rs 59.14. We are trying to build a consensus in GST Council on bringing petroleum under GST.

Although the present government takes the credit for the fuel price reform after the BJP came to power but recently these fuels too got politicized when ahead of the Karnataka assembly elections oil companies froze the daily hike of petrol and diesel prices for nearly three weeks.

In Mumbai, petrol price touched a new high of Rs85.29 per litre and diesel climbed hit its highest ever level of Rs72.96 amidst the relentless rise in global oil prices.

According to Indian media reports, petrol and diesel rates have touched record high in India. Whatever move the government makes over this issue shall surely be interesting to watch in near future considering that the BJP is in power in 20 states, other state elections are coming up this year and even Modi government does not have long time left in office.

In all, duty on petrol rate was hiked by Rs11.77 per litre and that on diesel by Rs13.47 a litre in those 15 months that helped governments excise mop up more than double to Rs242,000 crore in 2016-17 from Rs99,000 crore in 2014-15.

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