Keypoints:
- Over the past nine months, petrol prices have reached record high following spike in international crude rates.
- Petrol prices can fall to as much as Rs 75 per litre and diesel to Rs 68 per litre across the country if they are brought under the goods and services tax (GST).
- Currently, a litre of petrol costs Rs 91.17 in Delhi and diesel is priced at Rs 81.94 a litre.
For the commuters to get much needed relief over the rising prices of petrol and diesel, it has led to calls from several quarters for reduction in excise duty.
In the past nine months,petrol and diesel prices have touched record high causing problems to the local commuters. People are gradually getting back to work after almost a year of work from home and this has led to more demand of fuel and thus leading to price rise.
According to a report from SBI economist,petrol prices can fall to as much as Rs 75 per litre and diesel to Rs 68 per litre across the country if they are brought under the goods and services tax (GST) regime.SBI economists arrived at the rates after assuming global crude oil prices to be at $60 a barrel and exchange rate to be around Rs 73 per dollar.
At the current point of time,a litre of petrol costs Rs 91.17 in Delhi and diesel is priced at Rs 81.94 a litre.
“Bringing petrol and diesel under the goods and services tax is an unfinished agenda of the GST framework and getting the prices under the new indirect taxes framework can help,” the report said.
Currently, states choose to levy a combination of ad valorem tax, cess, extra VAT/surcharge based on their needs.Sales tax or VAT on petroleum products is a major source of own tax revenue for both the Central and state governments.
As per data released by the government, the central and state government together raised some Rs 556 lakh crore ($75.22 billion) in revenues from the petroleum sector in the fiscal year ended March 31, 2020.
Soaring rates of crude oil is also one of the major reason for rising fuel prices in domestic market.Brent crude oil spot prices averaged $55 per barrel in January 21, up $5 per barrel from it December 2020 average. However, it was $9 per barrel lower than the average in January 2020.
