Fuel prices continue moving higher, govt mulls GST option
Petrol prices in Mumbai crossed the Rs. 80 mark yesterday for the first time since August'14. Prices elsewhere have shot through the roof too. In Kolkata, Delhi and Chennai, it is selling at Rs. 74.94, Rs. 72.23 and Rs. 74.91 respectively. That's a 1-2% increase in one week. Oil Minister Dharmendra Pradhan said the government is trying to bring petrol and diesel under GST.
Diesel prices also at an all-time high
The situation was similar for diesel. It broke records again in the metros: in Delhi, it was being sold at Rs. 63.20 per liter, and in Mumbai, at Rs. 67. 30. Prices in Chennai and Kolkata were as high, touching Rs. 66.64 and 65.86 respectively.
A rise in global prices due to several factors
A steep increase in Brent crude prices has rattled rates across the globe. Prices yesterday stood at $68.89 a barrel. By the year end, it is expected to touch $80, and $100 by 2019. Last year's deal to cut production on the back of falling prices continues to drive up rates. There's a simultaneous decline in drilling activity in the US.
Protests all over against the steeply rising prices
Protesting the rising prices, petrol pump owners in Punjab threatened an indefinite strike if taxes on petrol and diesel aren't reduced. They have also alleged a nexus between smugglers and excise officials. The NCP, BKU and BJD too launched demonstrations in Maharashtra, Punjab and Odisha. In Indore, MP, the "Saksham Cyclothon" promoted fuel conservation. Pradhan too rode a bicycle, along with 30,000 cyclists.
Bringing petrol, diesel under GST will keep prices in check
The only solution is government intervention. Incidentally, the NDA government has increased excise duty nine times during November'14-January'16, but reduced it only once till now. Bringing it under GST will remove the excise duty and the VAT levied by states, likely keeping prices under Rs. 50. At the GST Council meeting last Thursday, the agenda was deferred to the next meeting.
