High central and state taxes have been the reason for high fuel prices in India.
In the last few days, fuel prices have touched record highs, with petrol costing Rs 76.87 per litre in Delhi and diesel Rs 68.08 a litre. Guess what! Now you will pay over Rs 86 per litre in Mumbai, over Rs 78 per litre in New Delhi and Rs 81 per litre in Chennai.
The present oil price hike is due to three main factors - hike in global price of crude, fluctuation in dollar and Indian currency ratio and some of the tax issues are also there. The Indian government benefited from falling crude prices since November 2014 and shore up its finances by hiking excise duty on fuel nine times between November 2014 and January 2016.
Oil prices declined on Monday on the news of an increase in output from top oil countries comprising Russian Federation, the United States and Saudi Arabia.
Though political parties blame each other for this situation, the common man is ending up paying higher prices because of a progressive increase in taxes.
"Unfortunately, the higher oil price has come at a time when the pound has weakened considerably against the dollar". However, Bihar Deputy Chief Minister Sushil Kumar Modi on Sunday said that "it is a big misconception (among the people) that price of petroleum products will be reduced significantly if they are brought under GST ambit". During the day, it tanked 11.44 per cent to Rs 155.45.
The Union Minister said the Centre had cut excise duty on fuel by Rs 2 in October previous year. "This will not only reduce the fuel prices but will also increase the government's revenue", Gadkari said.
The government continues to increase oil prices on both occasions when crude prices go up as well as go down, appropriating the amount of differences that accrue due to fall in crude prices.
The government is considering a windfall tax on oil exploration and drilling companies such as ONGC, Oil India and Vedanta-run Cairn India as part of a plan to cushion consumers from rising crude prices.