Taxes constitute a high proportion of the retail price of petrol and diesel. Nearly two-thirds of the price we pay for petrol goes to the Centre and states. Some seven years ago, crude oil prices constituted two-thirds of the retail price of petrol. Today, taxes imposed by the Centre and the states account for nearly the same. Despite, record low crude oil prices in the international market, the retail prices are skyrocketing which has put a burden on the pockets of Indian population.
People are finding it hard to cope up with these prices, and there have been mass protests by social groups and political parties. Due to high inflation and lowered salaries in Covid, the entire budget is dismantled as the common man has to pay more for commuting to his office, and at the same time, he has to pay more for the LPG cylinders at home.
"The retail prices are skyrocketing which has put a burden on the pockets of the Indian population."
Escalating fuel prices are set to put a burden on the pocket of the already stressed farming community. The transportation cost to take vegetables from the fields to the market will increase. This will be reflected in the prices of the essential food items.
When the GST was introduced on July 1 2017, combining over 12 central and state duties and taxes; commodities like petrol and diesel products were kept out due to Government dependency on these levies.
This meant that the central government continued to levy excise duty on them while state governments charged VAT. These taxes, with excise duty, in particular, have been raised periodically.
While the taxes haven't come down, the rise in global oil prices on-demand recovery has pushed petrol and diesel to a record high, leading to a necessary demand according to provisions, for them to come under the GST.
Presently, traders do not have to bear the cost as it passes on to farmers and consumers. The present situation of high dependency on petrol and diesel, makes us focus on more possible alternatives, such as CNG and e-vehicles.
A hike in fuel price would result in increased sale of e-vehicles providing twin benefits of economy and environment friendliness.
"The retail prices are skyrocketing which has put a burden on the pockets of the Indian population."
By:
Sushant Banga
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