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Centre & state should talk to bring down retail fuel price : FM

By Priyanka Verma 
Updated Date
Centre & state should talk to bring down retail fuel price : FM

Days after petrol prices crossed ₹100 a litre in several cities, Finance Minister Nirmala Sitharaman said that the rise in fuel prices is an “annoying issue” and that the Centre and state should talk to bring down retail fuel price to a “reasonable level”. There is “no answer except for fall in fuel price that will convince anyone”, she added.

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Addressing the media, the finance minister said, “I am treading on an area where whatever I may say to being reality into picture will sound like I am avoiding the answer or shifting the blame. Fuel price rise is an issue in which no answer except for reducing the price would convince anyone.” ,Addressing the media.

Responding to a question, Sitharaman said that it is a ‘Dharma Sankat’ situation and Centre and states need to figure out a way so that end price to consumers or the retail price of fuel is at a reasonable level.

Stating that the price of petrol and diesel is worked up by the oil marketing companies (OMCs), she said that oil prices have been freed and the Centre has no control over it.

“The OMCs decide whether to reduce or hike oil prices depending upon the cost incurred in importing the crude, refining it, distribution and logistics,” she said.

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Sitharaman further stressed that the constant hike in brent price since November, along with production cuts being predicted by Opec countries may put further pressure on oil prices in coming days.

On whether petrol, diesel can be brought under GST regime to bring down prices, the finance minister said that a decision on it can be taken only after a thorough discussion in GST council meet and with consultation among states.

Petrol has crossed Rs 100 mark in several cities and it is nearing Rs 100 per litre in several other cities across the country on the back of international crude price hike. Following today’s price rescission, petrol prices in Delhi surged to fresh record high of Rs 90.58 per litre while diesel price soared to Rs 80.97 per litre.

Meanwhile, Bal Malkit Singh, chairman of All-India Motor Transport Congress, called for an immediate reduction of diesel prices by bringing down central taxes. “The central government should issue an advisory to states to cut down Value Added Tax and bring uniformity in diesel prices across the country…

“He said they have given a 14-day notice to the Centre for implementation of their demands from February 16. “If demands are not met, we will have no option else but to suspend road transport services across the country.”

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Note that Central and state taxes make up for 61 per cent of pump petrol price while they constitute more than 56 per cent of diesel rates. In the case of Delhi, central excise duty and state value added taxes added Rs 32.9 and Rs 20.61 per litre to the cost of petrol. The base price, freight and dealer commission amounted to Rs 35.78 per litre for petrol.

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