Economy

Petrol breaches Rs 80 mark, on a 4-year high in Kol

Petrol breaches Rs 80 mark, on a 4-year high in Kol

Oil producers get paid worldwide rates for the oil they produce from domestic fields. But today the NDA government is putting the blame exclusively on the rise of crude oil prices by the oil producing countries.

The centre may also give some relief in excise duty rates to give immediate relief to consumers. The incidence of Central and state government taxes were the instruments for normalizing oil prices in the country which were kept at low rates so that the pressure on consumer was not too high.

He added that while oil minister Dharmendra Pradhan will meet oil marketing companies on Wednesday, they have been insisting that all petro products be brought under the Goods and Services Tax. 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.

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Windfall tax is levied in some of the developed countries globally. "The government is taking the matter of oil prices seriously". Petroleum minister will have a meeting with the officials of the oil companies.

The average prices of supermarket petrol and diesel has increased every day since the end of March, setting a record for consecutive daily rises.

In such a precarious scenario, where inflationary trends may rear its head at any time, Pradhan's attempts at restoring normalcy has been rather hollow even if the call for including petrol and diesel in GST is not for him to make.

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Though Pradhan's proposal is not wrong but the State would have to lose a huge amount in terms of revenue collected as State taxes on each liter of petrol and diesel sold, if it reduces VAT. But after the NDA government has come to power in May 2014 the prices of petrol and diesel have taken an ascending course, never coming down.

The government raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October past year by Rs2 a litre. In addition to this, the Value-Added Tax on the two auto fuels varies from State to State.

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