No plans to reduce Value-Added Tax on fuel, indicates Guj Deputy CM

Posted May 27, 2018

With protests over the petrol price gaining momentum across the country, the price of fuel continued to increase for the 12th consecutive day on Friday. Wednesday also marked the tenth straight day of hikes in Delhi, Mumbai, Kolkata and Chennai, among other cities, in range of 14-34 paise a litre in case of petrol and 21-31 paise a litre in diesel.

He further pointed out that less production of oil in the Organization of the Petroleum Exporting Countries (OPEC) and hike in crude oil price in the worldwide market are some of the factors affecting the fuel price. For this reason, these days when we pay Rs 80 for a litre of petrol out of it Rs 35-40 is going to the governments i.e. state and union.

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

Currently, the fuel prices are varying from state to state as the prices of fuel and diesel also depend on the local sales tax or VAT (value added tax).

Fadnavis' comment came amidst rising prices of petrol and diesel over which the opposition has been targeting the Narendra Modi government. It is possible to cut up to ₹25 per litre, but the government will not.

The rise in crude prices can be contained, said Kaushik Madhavan, Director - Automotive & Transportation, MENASA at Frost & Sullivan.

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According to the finance ministry's revenue collection estimates, the central government collects more than Rs. 2.579 lakh crore by levying taxes on petroleum products.

Similarly, in Delhi the fuel's price inched higher to a new record of Rs 77.17, and in Kolkata, it cost Rs 79.83, nearly a five-year high.

Petrol and diesel prices touched new highs of Rs 76.87 and Rs 68.08 a litre, respectively, in Delhi on Tuesday.

The BJP-led government had in June last year junked a 15-year old practice of revising rates every fortnight and introduced daily revisions which worked well except periods immediately preceding an election. Just as the Goods and Services Tax (GST) has improved the efficiency of the transport sector, similarly such a measure would help fuel, he added.

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 global oil rates, Moody's said in a report. "The Centre has given Maharashtra in last four years what was not given in the last 20 years", he claimed.

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