How record high fuel prices impact citizens

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An increase in fuel prices has affected not only those who have their own vehicle but also those who don't own one. Rising fuel prices impact citizens' lives because steep fuel prices lead to higher inflation. It affects prices of other essential goods. The value of essential commodities like food , medicines etc have been adversely affected by a rise in  fuel prices. 

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Current situation in Indian cities

 Since the first week of May there has been a steep rise in  petrol and diesel prices that have become a concern for the citizens. It has impacted their livelihood. According to research the domestic fuel prices have increased 35 times  becoming dearer by Rs 7 to 8 per litre. The petrol price in Mumbai has reached Rs 106 per litre and in Delhi it has just crossed a hundred rupees per litre. In Rajasthan's Sri Ganganagar,  diesel prices have reached Rs100 per litre.

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Reason behind rising fuel prices

 Due to the acceleration in the global crude oil demand there has been a rise in fuel prices. The Brent crude oil crossed $76 per barrel. The main reason behind the rise in oil prices in countries like India is the global situation. Taxes have proved to be the other reason for the surge in prices because India levies highest taxes on petrol and diesel in the world.

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Is there a solution?

Experts believe there are two ways to deal with the rising fuel price crisis — either bring it under GST or a reduction in excise duty. However, the central government and states are not keen on slashing respective taxes levied by them due to the high revenue they have generated amid the ongoing pandemic.

The duty levied by the Centre of petroleum products makes up almost 90 per cent of the total excise duty it collects. In comparison, the states charge an average VAT of Rs 23 per litre.While the central and state governments have depended on petroleum products for a long time to generate additional revenues, excise duty has started going up sharply since 2014.