Despite record high rates, the government is adamant about not decreasing taxes on gasoline and diesel. This is why:

Despite the fact that gasoline and diesel prices are at all-time highs across the country, the federal government is adamant about not lowering excise duties on fuel. The country currently has the highest taxes on gasoline and diesel in the world. It should be remembered that the Centre levies an excise duty of Rs 32.90 per litre on petrol and Rs 31.80 per litre on diesel. Despite the fact that gasoline and diesel prices are at all-time highs across the country, the federal government is adamant about not lowering excise duties on fuel. The country currently has the highest taxes on gasoline and diesel in the world. It should be remembered that the Centre levies an excise duty of Rs 32.90 per litre on petrol and Rs 31.80 per litre on diesel.

Union Oil Minister Dharmendra Pradhan recently stated that the government’s spending surged during the second wave of the epidemic as a result of vaccinations and other welfare programmes.

He also chastised several states for levying excessive value-added taxes (VAT). Rajasthan, Maharashtra, Madhya Pradesh, and Telangana are among the states with higher VAT rates than the national average of Rs 23 per cent.

Meanwhile, Finance Minister Nirmala Sitharaman insists that the Centre and the states must talk about the problem because it affects both. However, given the current economic situation, even governments are hesitant to reduce the VAT they levy on petrol. They also hold the Centre responsible for the high excise duty on gasoline and diesel.

As things stand, both the federal government and the states agree that fuel prices are high, but neither has devised a strategy to alleviate the burden on citizens. If worldwide crude oil prices continue to rise, the burden could become even greater. While lowering high gasoline taxes is one strategy to lower fuel prices, another is to include petroleum production under the Goods and Services Tax (GST). The financial sector is growing.

Given the circumstances, bringing petroleum goods under GST appears to be a long shot, and citizens may be forced to accept increased fuel prices. Their only hope is for worldwide crude oil prices to fall. International crude oil prices have decreased substantially in recent days due to rising uncertainty amid rising Covid-19 , which appears to be a ray of optimism.

It should be emphasised that petrol prices in two dozen cities, including Delhi, Kolkata, Chennai, and Mumbai, have already surpassed Rs 100 per litre. In Rajasthan’s Sri Ganganagar, diesel prices have also surpassed the three-figure level, while most other cities’ prices remain above Rs 90 per litre.

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