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Union Minister wants Petrol, Diesel under GST, but will Modi listen?

Friday September 15, 2017 10:46 PM, News Network

Petrol Prices

Gurugram (Haryana):
Amid rising prices, Dharmendra Pradhan, Minister for Petroleum and Natural Gas in the Narendra Modi-led NDA Government, on Friday said that petroleum products should be brought in the ambit of Goods and Services Tax (GST).

"We have to have a rational tax management. Both the state and union governments have to come to this consensus that petroleum products must come under the GST mechanism", Pradhan said while talking to reporters.

But, the big question is: Will Prime Minister Narendra Modi will listen to his minister, especially when his government is accused of loot as the oil companies are increasing the petroleum prices without any control.

While launching GST, Modi also boasted of "One Nation, One Tax" theory. Critics therefore ask why petroleum products have been exempted?

Data showed that prices of petrol and diesel in India are manifold because of heavy taxes imposed by the central and state governments.

According to data released by the Indian Oil Corporation, the fuel costs only Rs 26.65 at the refineries. Dealers get a litre of petrol at Rs 30.70. But, petrol is sold at Rs 70.39 a litre in Delhi. This means Rs 39.41 is charged as tax component and dealer's commission on every litre of petrol sold in the national capital.

Analysts calculate that if the petrol and diesel prices are brought under GST, the price of petrol can come down to Rs 38.1 per litre in Delhi. As for diesel, its current price in Delhi is Rs 58.72 per litre. At 12 per cent GST, diesel will sell at Rs 36.65 in the national capital.

Ironically, Delhiites are paying Rs.70.39 for a litre of petrol when crude is costing at some $55 a barrel. It is the same cost Delhiites were paying in 2014 when crude was priced more than $100 a barrel.

It is hence comman man says some problem is indeed there with the government policy vis-a-vis petroleum prices.

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