Odisha govt should cut its Value-Added Tax to control fuel price: Dharmendra Pradhan

Odisha govt should cut its Value-Added Tax to control fuel price: Dharmendra Pradhan

Odisha govt should cut its Value-Added Tax to control fuel price: Dharmendra Pradhan

Today the petrol price of New Delhi has touched a new high of Rs 78.12 per litre higher by 15 basis points compared to previous day price of Rs 78.27 per litre.

Petrol and diesel prices are touching the roof again and the politics surrounding it has also reached its crescendo.

In 2017, the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation had chose to limit their production to stabilize the rates and market, when oil prices hit as low as $30 per barrel in 2016.

In tandem with petrol prices, diesel prices in Delhi, Kolkata, Mumbai and Chennai also rose to fresh record highs of Rs 68.75, Rs 71.30, Rs 73.20 and Rs 72.58 per litre, respectively. While New Delhi was quick to increment the fuel charge when the global rate went up, it is expected to exhibit a similar market-volatility for lowering the prices. However, Bihar Deputy Chief Minister Sushil Kumar Modi on Sunday said that "it is a big misconception (among the people) that price of petroleum products will be reduced significantly if they are brought under GST ambit".

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Officials indicated that the windfall tax on oil producers was the most likely solution as the finance ministry was against cutting excise duties. A similar tax was considered in 2008 when oil prices were on the rise but the idea was dropped after stiff opposition from private sector firms like Cairn India. High central and state taxes have been the reason for high fuel prices in India.

Five years ago during the UPA government the crude prices were 40 per cent costlier than subsequent years. While the crude oil went below the mark of $30, fuel prices have not come down, accordingly. Clearly, the NDA government has been milking the sector for higher tax revenues, and has denied consumers the benefit of lower worldwide crude oil prices that prevailed around the time that the NDA assumed power.

Indian Oil (IOC), the country's top refiner, will turn to its traditional oil suppliers, mostly in the Middle East, if US sanctions against Iran result in supply disruptions, its head of finance said.

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