- Taxes and duties make up for about 60 per cent of the retail price of petrol and diesel in India.
- High fuel prices have forced some Indian states to cut state-level taxes on petrol and diesel to bring down the prices.
- The Govt. of India raised taxes twice on petrol and diesel in the last year (due to the pandemic) to boost tax revenues instead of passing on the benefits of low oil prices last year.
Sources have reported that India’s finance ministry is considering the cut of excise duties on petrol and diesel in a bid to control the spiralling domestic prices.
The Govt. of India raised taxes twice on petrol and diesel in the last year to help the economy recover from the pandemic and boost tax revenues instead of passing on the benefits of low oil prices last year.
However, the doubling of crude oil prices over the past 10 months has contributed to record-high fuel prices in India. Sources revealed that the Indian Finance Ministry is currently in discussions with various authorities to pull down the prices without federal finances taking a hit.
Rumours have it that a solution may be arrived at by mid-March, as the government wants oil prices to stabilise before cutting taxes. They’d want to avoid a tax re-structure should crude prices rise further.
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