India to take a long-term view on fuel pricing: Ravi Shankar Prasad

India to take a long-term view on fuel pricing: Ravi Shankar Prasad

India to take a long-term view on fuel pricing: Ravi Shankar Prasad

Domestic fuel prices track global oil rates, which have risen on expectations of lower supplies from Iran, from major exporter Venezuela and from top exporter Organisation of Petroleum Exporting Countries (OPEC) that has enforced production cuts. Talks are going on with finance ministers of all states, Fadnavis said, adding, "Once petrol and diesel are brought under the ambit of GST, its threshold will change, because right now, taxes upon taxes are levied which increases rates".

"A task force is already working on reducing the fuel prices".

As the prices of petrol and diesel continued to soar high on Tuesday, the public requested the government to reduce the price as it's affecting their budget.

"With rising crude prices and a depreciating rupee, petroleum is bound to get more expensive", it states.

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 Indian basket crude oil price was $77.04 a barrel on Tuesday. Basically, the problem is "taxes" which are imposed by the government on petrol and diesel.

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The government is seriously considering the matter of rising oil prices and is looking to resolve the issue in the coming days. After moving to daily revision of fuel prices in June last year, the government had cut basic excise duty on petrol and diesel by Rs 2 per litre in October last year. Rates vary from state to state depending on the incidence of local sales tax or VAT.

This brings us to another crucial question: Why hasn't the government included petrol and diesel in the Goods and Services Tax (GST) regime?

But the risk of them (oil producing companies) being asked to once again bear a part of the subsidy is looming with the recent rise in worldwide oil rates, Moody's said in a report.

India is known for its "high taxing framework" and crude prices are the victim of the same. On Thursday, the price of petrol touched Rs 85 per litre in Mumbai while diesel was retailing at Rs 72.96. "The Centre has given Maharashtra in last four years what was not given in the last 20 years", he claimed. Under GST, the maximum tax slab is that of 28 per cent whereas the government is collecting much higher taxes by keeping petrol and diesel out of GST.

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