Work out a solution
The ever increasing fuel prices are hitting us hard. Every sector of the economy has been facing tough days the moment fuel prices started an upswing and continue to do so for more than four months now.
Since then in most of the states petrol prices are touching almost close to 100 Rupees a litre with just two cuts announced this week amounting to mere 50 paisa. The Fuel prices have been showing no signs of decline since many weeks now.
This despite the international crude oil prices remaining almost the same during the past many months. In 2013 crude oil prices were around 61 dollars and today the price is around 66.06 dollars. However, petrol was selling as Rs 46 at that time and diesel was priced at around 38 Rupees.
Though fuel prices, which vary from state to state depending on local sales tax or VAT, are now at a record high in the country, prompting cries for a cut in excise duty to ease the burden on consumers.
The soaring rates of petrol and diesel have led to calls from several quarters for reduction in excise duty so that commuters can get some much-needed relief. As people gradually get back to work from office after last year’s pandemic-induced work from home scenario, demand for fuel has also witnessed a rise.
Petrol and diesel prices have touched record highs over the past nine months following spike in international crude rates.
However, SBI economists have been calling for bringing fuel under the GST regime which would immediately bring down the prices. These experts have been claiming that petrol prices can fall to as much as Rs 75 per litre and diesel to Rs 68 per litre across the country if they are brought under the goods and services tax (GST) regime.
However, accepting such a suggestion seems highly unlikely as it would cause an annual revenue loss of Rs 2 lakh crore to all states as the Centre and states collectively collect over Rs 5 lakh crore as taxes on fuel and the states get around two lakh crore rupees as share from these taxes.
What is concerning is that the central government has responded by blaming the price hike on curtailed oil output by Saudi Arabia. The country has pledged additional voluntary output cuts of 1 million barrels per day in February and March, which has led to price climbing since the pandemic broke out.
Since Jan 6 this year the rates have gone up with just two declines being recorded that too amounting to mere 50 paisa.
The fuel prices are rising too fast and even though the economy is officially in recession, the fresh hike means additional burden for a common man. And as the economy is showing little signs of recovery, the earnings for the common man have dried up tremendously and the price rise is only adding to his woes.
In this scenario the states as well as the centre needs to work out a formula where both can agree on letting some taxes to be cut so that the common man feels some relief.