Can't keep changing fuel prices on knee-jerk basis: Pradhan

Has government realised consumers won't ignore steep hike in fuel prices?

Has government realised consumers won't ignore steep hike in fuel prices?

He said, only temporary phenomenon of rising trend is being highlighted by the media and critics.

India relies on imports to meet 80 percent of its needs and so domestic fuel rates have been aligned to movement of equivalent product prices in the worldwide market since April 2002.

Though Centre and state both make handsome gains from fuel sales, the continuous rise in pump prices has turned the focus on the Centre raising excise duty on nine occasions between November 2014 and January 2016 to keep part of the savings from falling global crude - and product - prices.

While every other product and service has been put under the Goods and Service Tax (GST), the exclusion of petrol and diesel from the new tax regime has left consumers helpless as fuel prices have hit a new high. Allocations on all these heads has gone up significantly.

He further apprised that there is no plan to review the excise on petrol and diesel.

Earlier this month, Oil Minister Dharmendra Pradhan ruled out cutting taxes on petrol and diesel to cushion the impact of rising global oil prices.

The excise duty hike resulted in the government's excise mop-up more than doubling to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

He said 42 percent of excise collections are transferred to state government for infrastructure and welfare programs. The windfall from the excise duty hikes has helped the government bridge its budgetary deficit. Also, many state governments have drastically increased Value-Added Tax. Similarly, the price of diesel is at a three-year high in the metro cities of Kolkata and Chennai at Rs 61.37 and 61.84 per litre respectively.

Meanwhile, under the daily revision of fuel prices, petrol in Mumbai on Monday cost Rs 79.41 a litre, breaching the level it last touched in August 2014.

"It is high time GST Council should consider bringing the petroleum products in the ambit of GST", he said.

The daily price revision, he said, is in the interest of consumers.

"Dynamic fuel price mechanism is the most transparent model for consumers; it can't be changed on knee-jerk basis", he said. "It is time that he passes of the benefit of 50 per cent reduction in global prices of crude oil to the common person and government stops looting people to fill up its coffers", he added.

States are opposed to bringing petrol and diesel under GST as these are their major sources of revenue.

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