Why do Indians continue to pay high oil price despite low global rates?
It is a given that consumers pay more than 100% tax (with state and central levies together) on diesel and petrol. Fuel prices in India have hit a three-year high despite global crude rates cut half over the same period that makes many Indian citizens wonder why they should still pay high for petroleum. ( An official BJP source explains how various factors are attributed in a liter price - source: Twitter.com ) While the central government avers that the states should cut more on fuel prices as they earn almost double than the centre through petrol and diesel taxes, a closer analysis on the fuel price breakup shows that the allegation made by the ruling BJP is not true. ( Former Minister P. Chidambaram slams BJP for the ‘unfair’ petrol price rise - source: starofmysore.com ) As BJP is sailing hard through the tough times created by the slow economic growth due to disruptions from demonetization and GST, the central government, however, finds it challenging to cut the duty on diesel and petrol. Adding to the GST effect, the subdued tax collections may further lead to more backlash towards the central government from the public and the states who are against the government plan to levy GST on petroleum products and have high hopes to slash the fuel rates in the coming months.
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