Why hike prices on daily basis?
Petrol in Mumbai sells for ₹87.29 a
litre on October 7 and diesel is priced at ₹77.06. In BJP-ruled States, the
reduction was higher as they matched the cut with a similar reduction local
sales tax or VAT. But the prices were on the rise from the very next day.
Delhi, which did not cut VAT on
fuel, still has the cheapest fuel in all metros and bulk of state capital as it
levies lower taxes. Mumbai despite reducing VAT on petrol still has the highest
priced fuel.
After the Centre cut excise duty by
₹1.50 per litre and asked PSU oil firms to subsidise fuel by Re 1, Maharashtra
and Gujarat governments were among the first to announce a matching ₹2.50 cut.
They were later joined by
Chhattisgarh, Jharkhand, Tripura, Uttar Pradesh, Madhya Pradesh, Himachal
Pradesh, Haryana Assam, Uttarakhand, Goa and Arunachal Pradesh with similar
moves. Jammu and Kashmir, which is under governor’s rule, too reduced tax on
the two fuel. Maharashtra, however, reduced VAT only on petrol and not on
diesel. Even before the excise duty cut, Rajasthan, West Bengal, Karnataka,
Kerala and Andhra Pradesh had last month reduced VAT to cushion consumers for a
spate of price increases.
The reduction in excise duty will
dent central government revenues by ₹10,500 crore and was aimed at cooling
retail prices that had shot up to an all-time high. Almost half of the fuel
price is made up of taxes.
Market mechanism prevails and price
change is unavoidable. But local taxes may be reduced and OPEC countries may be
requested to increase output or Iranian oil should not be stopped on US
sanction.
Why our political leaders are
hiking petrol prices on a daily basis?
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