"India to take a 'long-term" view on fuel pricing - minister

Fuel prices record 13 revisions since last November

Petrol prices are at an all-time high in the Indian cities and so is the case with diesel.

India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for about 40-50 percent of pump prices.

But, there is nothing much our government can do in the given situation because it cannot cap the prices of petrol and diesel, revised daily amid rising crude prices, said analysts. As per calculations done by the prime minister's chief economic adviser, Arvind Subramanian, in his latest economic survey, every $10/barrel rise in crude prices slows growth by 0.2-0.3 percentage points and fuels Wholesale Price Index (WPI) inflation by 1.7 per cent. "The rise in prices is completely outside the government's [control]". It is possible to cut up to ₹25 per litre, but the government will not. Basically, the problem is "taxes" which are imposed by the government on petrol and diesel.

Under the Manmohan Singh government, the prices of petrol and diesel were regulated and subsides were given to ensure that prices were tolerable and fuels remained cheaper. Rates vary from state to state depending on the incidence of local sales tax or VAT. If we go a decade back then in July 2008 global crude oil rates were $142 per barrel which made petrol and diesel in the India to be sold at Rs 50.62 per litre and 34.86 per litre. The cost of petrol in Delhi today is at Rs 77.47/litre, and those having diesel cars will have to dish out Rs 68.53 per litre. The prices have touched a record high.

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

RAC fuel spokesman Simon Williams said: "Fuel prices are now at their highest since mid-October 2014 (16 October 2014) which means we are paying 25p more a litre than we were at the start of 2016 when oil crashed to $26 a barrel and the average price of both fuels was around 101p". The UPA government finally freed petrol price in June 2010 and the diesel rates were decontrolled by the current BJP government in November 2014. "The Centre has given Maharashtra in last four years what was not given in the last 20 years", he claimed.

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