Fuel prices are once again down for the fifth straight day. Petrol price was cut down by 9 paise to Rs 78.11 in Delhi. Today's petrol price in Kolkata is Rs 80.75, down by 9 paise; in Mumbai Rs 85.92, down by 9 paise and in Chennai Rs 81.09, down 10 paise. Diesel prices were unchanged in all metro cities.
In last five days, petrol price in Delhi has come down by 32 paise from its record high of Rs 78.43 on May 29. But, the reduction amount is still lower than what the oil marketing companies hiked in 16 consecutive days - from May 13 to May 29, petrol price was raised by Rs 3.8 and diesel by Rs 3.38 per litre.
The opposition parties have termed the high fuel prices as a cruel joke on the people, especially the middle class and farmers. Congress spokesperson RPN Singh recently said that in the last four years, the government has collected as much as Rs 10 lakh crore through central excise on petrol and diesel. The opposition parties have been demanding taxes on fuel. However, the Centre and states are tight-lipped on tax cut. So far, only Kerala has cut the tax on petrol and diesel by Re 1.
Union Minister Prakash Javadekar on Saturday said that the central government was working to find a long-term solution to curb the spiralling fuel prices. He, however, also urged the states to come together to help the consumers as they also levy VAT. According to analysts, the government has two options to deal with rising prices - reduction in taxes (excise and VAT) and bringing fuel products under the GST.
However, the government is working on another plan. According to reports, the government is mulling to introduce a windfall tax on oil producers like ONGC as part of a permanent solution. The government does not want to cut excise duty as one rupee cut will result in Rs 13,000 crore loss for the exchequer annually. Reports suggest that the government may ask ONGC to give subsidy to fuel retailers so that they can sell petrol and diesel at below market rates.
Last month, petrol and diesel prices hit an all-time high due to uptick in international crude oil cost. However, the crude oil prices came down this week after Saudi Arabia and Russia announced that they would lift supply curbs that had pushed crude prices to their highest since 2014. Last year, the organization of the petroleum exporting countries and Russia had decided to cut the supply to prop up the prices that had fallen to their lowest in more than a decade.
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