High Petrol, Diesel Prices: States May Protest, But Govt Needs To Quickly Bring Fuel Products Under GST

High Petrol, Diesel Prices: States May Protest, But Govt Needs To Quickly Bring Fuel Products Under GST

Dharmendra Pradhan, the petroleum minister, has tweeted that the answer to the spiraling fuel prices could lie in bringing petroleum products under the GST regime. In Delhi, the petrol price is Rs 70 a litre whereas in Mumbai it is Rs 80 as pointed out by the Finance Minister Arun Jaitley. It could be as low as Rs 38.10 at both the cities if it were under the GST regime attracting a 12 percent tax. But Pradhan has also gone on record citing at least a dozen countries that sell petroleum products at prices higher than India.  This may seem to be a contradictory stand but it isn’t.  These countries have an agenda—to discourage the consumption of polluting and steadily depleting fossil fuel. India however doesn’t have such an explicit green agenda to rationalise high fuel prices but arguably a weak alibi—mobilising resources for infrastructure building.

Indeed, the state governments have to bear a large part of the blame for the spiraling fuel prices.  They run with the hare and hunt with the hound. They blame the Centre for the rising petrol and diesel prices despite knowing that they are the ones who have opposed bringing in of petroleum products into the GST net for the fear of losing substantial revenue. On 15 September 2017, the price of a litre of petrol at any Indian Oil outlet in Delhi was priced at Rs Rs 70.43. Read More…

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