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Fuel fractions: on petrol, diesel prices
News:
- Prices of petrol and diesel recently get reduced by Rs one paisa per litre after reduction in oil price in international market.
Important facts:
2. It is advised that both central and state government should cut the tax on petrol and diesel to give benefits to consumers.
3. Central government raises excise duties heavily in recent time. Leverage is provided by reduction in oil price in international market.
4. States government impose ad valor-em duties on fuel products. Average tax is 26% while Maharashtra impose 39.27% tax.
5. States also impose value-added tax on the fuel price which is inclusive of central excise duties. This leads to double taxation and further increase in price.
6. An SBI research report says prices could go down by Rs3.75 and Rs5.75 a litre for diesel and petrol respectively, if only double taxation is controlled.
7. Rising crude prices, inflation and the trade deficit puts pressure on the rupee and GDP growth.
8. Because of these issues, global rating agencies are lowering India’s growth expectation for the financial year 2018-19.
9. Kerala has shown the way by reducing sales tax on fuel by Rs 1 per litre.
10. The high taxes on fuel need to be cut when price rise again.
