New Delhi: Fuel rates have been skyrocketing in India over the last days amid rising crude oil rates in international markets over lower production in Organisation of the Petroleum Exporting Countries (OPEC) countries.
“Government has increased its investment and 34 per cent more capital spending will be done in this budget. State governments will also increase spending. This is why we need this tax but there is also the need for balance. I believe the Finance Minister and state governments can find a way,” the Centre has said.
Though the Centre has refused to cut down taxes, four states — West Bengal, Rajasthan, Assam and Meghalaya — have reduced VAT to give a breather to the final consumers.
Meghalaya has given the biggest relief by reducing the petrol and diesel prices by Rs 7.4 and Rs 7.1 respectively. It has also reduced the VAT on petrol from 31.62 per cent to 20 per cent and from 22.95 per cent to 12 per cent on diesel.
Similarly, Assam and West Bengal, where assembly polls will likely be held in April and May this year, have also reduced taxes of fuel prices.
In Assam, the state government has reduced fuel prices by Rs 5 by withdrawing the additional tax imposed last year to raise funds for the COVID-19 pandemic. Meanwhile, West Bengal has cut the VAT on petrol and diesel by Re 1.
Rajasthan, on the other hand, has reduced the VAT to 36 per cent from 38 per cent on fuel prices to give relief to the final consumers.
Why fuel prices are rising in India
While the Centre has refused to cut VAT on fuel prices, Union Petroleum and Natural Gas and Steel Minister Dharmendra Pradhan on Sunday termed “less fuel production by manufacturing countries to gain more profit” as one of the reasons behind the price hike.
“There are two main reasons behind the fuel price rise. The international market has reduced fuel production and manufacturing countries are producing less fuel to gain more profit. This is making the consumer countries suffer,” he said while speaking to news agency ANI.
“We have continuously been urging the OPEC and OPEC plus countries that it should not happen. We hope there will be a change,” he added.
The Centre had last reduced taxes on petrol and diesel in October 2017 by cutting the excise duty. However, it was raised last year as a part of the Centre’s efforts to raise revenues. Amid this, petrol and diesel prices reached new highs on Saturday. So far, February has seen a spike of Rs 4.29 on petrol and Rs 4.31 and diesel across the country.