With petrol and diesel prices touching multi-year highs, oil minister Dharmendra Pradhan on Monday said the government is keeping a close eye on international prices, but said there is no going back on free market pricing.<\/p>\n
He said consumers will benefit if petrol and diesel are brought under Goods and Services Tax (GST) regime at the earliest.<\/p>\n
Petrol prices hit a four-year high of Rs 73.83 a litre on Monday, while diesel rates touched an all-time high of Rs 64.69 in the national capital on rising international oil rates.<\/p>\n
\u201cIndia needs market pricing to provide oil to all,\u201d Pradhan said at an event organised to mark the launch of Euro-VI grade petrol and diesel in the national capital.<\/p>\n
Fuel pricing is based on a transparent mechanism, he said, attributing the spurt in rates to happening in international market. \u201cWhen crude oil prices rise, naturally consumer feels a pinch,\u201d he said.<\/p>\n
\u201cWe are concerned (about the impact on consumers). We are keeping a close eye on the developing international oil scenario,\u201d he said.<\/p>\n
He, however, did not offer any hint of a government intervention like cutting excise duty to give relief to consumers.<\/p>\n
\u201cCentre and state bank on tax revenues to meet developmental needs. 42% of collections from excise duty (on petrol and diesel) goes to states and out of the remaining 60% is used to fund centre\u2019s share in development schemes in states,\u201d he said.<\/p>\n
Pradhan said the GST Council – the apex decision making body of the new indirect tax regime – should in the \u201cinterest of energy security and consumers\u201d include petroleum products in GST.<\/p>\n
Petrol, diesel, natural gas, crude oil and jet fuel are currently not included in GST, which essentially leads to producers not being able to set-off tax paid on inputs from final tax on product.<\/p>\n
The government, he said, had cut excise duty on petrol and diesel by Rs 2 per litre in October and some states had followed it up with a reduction in VAT .<\/p>\n
\u201cWhen there is a pricing issue, states should respond and cut VAT,\u201d he said.<\/p>\n
State-owned oil firms, which have been since June last year revising auto fuel prices daily, today raised petrol price by 10 paise per litre and diesel by 11 paise.<\/p>\n
Petrol in the national capital now costs Rs 73.83 a litre, the highest since September 14, 2014 when rates had hit Rs 76.06. Diesel price at Rs 64.69 is the highest ever, with previous high of Rs 64.22 being on February 7, 2018.<\/p>\n
India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.<\/p>\n
The government raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.<\/p>\n
Subsequent to that excise duty reduction, the Centre had asked states to also lower VAT but just four of them — Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh — reduced rates while others including BJP-ruled ones ignored the call.<\/p>\n
The central government had cut excise duty by Rs 2 per litre in October 2017, when petrol price reached Rs 70.88 per litre in Delhi and diesel Rs. 59.14. Because of the reduction in excise duty, diesel prices had on October 4, 2017 come down to Rs 56.89 per litre and petrol to Rs 68.38 per litre. However, a global rally in crude prices pushed domestic fuel prices far higher than those levels.<\/p>\n
The October 2017 excise duty cut cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year.<\/p>\n","protected":false},"excerpt":{"rendered":"
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