Union oil minister Hardeep Singh Puri has urged states that did not reduce the Value Added Tax rates on petrol and diesel to cut it down now, amid months-high fuel prices across the country. The high fuel rates have directly impacted the inflation rates of the last two months, after petrol price as well as diesel price were increased relentlessly before coming to a halt. However, the petrol price hike has shot up the cost of almost every commodity, which has landed the consumer in a soup.
The minister urged non-BJP ruled states to reduce the Value Added Tax (VAT) on petroleum products to give relief to consumers, pointing out that the Centre has already reduced its duties in one action. The petroleum minister accused such states of ‘making a killing’ and asked them to reduce the VAT by 50 per cent so consumers could have a breather. Speaking at Times Network India Economic Conclave, Puri asked, “I want to understand how you can criticise the Centre on fuel pricing when your own VAT is exorbitant?”
The centre had cut the excise duty on petrol and diesel on November, which made the fuel prices cheaper by Rs 5 each. This was followed by several states, mostly BJP-ruled, cutting the VAT on petrol and diesel and taking their prices further down. Petrol price hike was kept at a pause after that, and the rates increased after the poll results in Uttar Pradesh and four other states in March, prompted by a jump in global crude oil prices.
Puri said that the government was not responsible for oil marketing companies increasing prices of petrol and diesel. “Oil marketing companies (OMCs) are also responsible citizen entities. Now if you’re making money, I’m just hazarding a guess, on petrochemicals and if you think that there is some under-recovery on another, you might decide to postpone that under-recovery for a while,” said the minister while denying allegations that the government was dictating OMCs to hike fuel prices.
At the current moment, oil marketing companies are selling auto fuels significantly below the market prices. However, the exorbitant taxes are giving rise to inflation across the country.
“I’m worried about inflation. We keep monitoring. We have to make sure it doesn’t go beyond a point,” he said, while adding that the whole world was faced with inflation. After the elections, when the price reviews started, the hike has only been by Rs 10 per litre which is far less than others, he further said.
At the global level, there is a need for the Organization of Petroleum Exporting Countries (OPEC), especially the nations in Africa, to increase the supply of crude, the minister said, adding that prices are firming up because of lower supply.
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