India witnessed an increase in fuel prices but why is the government refusing to cut down excise duty?
The Indian population is witnessing a rise in fuel prices and has been demanding the government to cut back on the high rates of petrol and diesel. But the government has been resisting cutting down the excise duty on fuel prices. The reason behind the increase in the fuel prices on an international level is directly impacting the decision of the government to not reduce the taxes on them.
The petrol and diesel price in India move in the same line as the international positioning and pricing of crude. The demand for crude has increased in the last few months after having suffered a terrible downfall during the peak of the Covid-19 pandemic. This increase in demand for crude oil is one of the reasons why the rates have increased globally.
The global increase had a direct impact on the prices of fuel in India. India was bound to increase the fuel prices. The price of crude has reached $65 per barrel due to the push from the US catastrophe. This very reason gives birth to another reason for the increase in fuel prices.
The government is not cutting down the taxes on fuel. This is because the international surge has left very little to no scope for the government to make revenue from the petroleum sector. It is well known that the government is witnessing problems in the economic sector and to manage its finances, it is resorting to taxes.
When the media tried to extract answers from Dharmendra Pradha, who is oil minister of the country, he blamed the output cuts by the global oil-producing nations for the rise in the International rise. This is the reason the retail rate in India is higher.
“The price-sensitive Indian consumers are affected by rising petroleum product prices,” he said adding that international agencies should consider abating production cuts. For the government too, it is a matter of funds so it is resisting itself from cutting down the excise duty. The Budget 2021 asked the center to look after a rapid increase in petrol prices.
This is after the prices keep moving up even after 10 days in a row for petrol and diesel. In the national capital, petrol prices have crossed Rs 90-mark and the diesel has reached Rs 80.60.
People have started taking a dig at the government after a section of the commentators highlighted that it was Prime Minister Narendra Modi who pointed out the petrol hike during the UPA government.