PM Modi taking fuel price hike seriously, says Union minister

Posted May 27, 2018

Even as the oil marketing companies raised fuel prices for the 10th consecutive day, the Government had no firm answer to the problem.

Drivers are being warned that prices at petrol and diesel pumps could increase again. "So we are trying to make a consensus in GST Council on bringing petroleum under GST, that will decrease the price", Fadnavis said while replying to rising petrol and diesel prices in the state.

The hike in the fuel prices is due to the less production of oil in the Organisation of the Petroleum Exporting Countries (OPEC) and hike in crude oil price in the worldwide market. "Bonanza to Central government is ₹25 on every litre of petrol".

Despite the astounding profits that OMCs have made in the last few years, fuel prices for consumers have gone from bad to worse. Opposition leaders have criticised the government for failing to rein in rising fuel prices, a politically-sensitive issue in one of the world's biggest economies.

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Every day seems to be a new record for the prices of petrol and diesel in India.

Indian petrol and diesel prices are benchmarked against Singapore gasoline prices and Arab Gulf diesel prices, which mostly track movements in crude oil prices.

But the economic experts say that it is not possible.The Narendra Modi government has a fiscal deficit target of 3.2% for the fiscal year 2018-19. This is because of the global oil price fluctuation. The Centre had in June last year junked the 15-year old practice of revising rates every fortnight and introduced daily revisions. The Central government levies ₹19.48 excise duty on a litre of petrol and ₹15.33 on diesel. State sales tax or VAT vary from state to state.

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.

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According to Moody's Investors Service, ONGC and OIL could be asked to bear a part of government's fuel subsidy for oil, if prices stay above $60 per barrel for the fiscal year ending March 2019.

In all, duty on petrol rate was hiked by Rs11.77 per litre and that on diesel by Rs13.47 a litre in those 15 months that helped governments excise mop up more than double to Rs242,000 crore in 2016-17 from Rs99,000 crore in 2014-15.

Just four of them-Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh-reduced rates while others including BJP-ruled ones ignored the call.

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