Mumbaikars root for GST to get petrol for Rs 29 less

Will Modi live up to Rahul’s #FuelChallenge? This was the question foremost on the minds of the public, especially in Mumbai, after the Congresspresident’s tweet daring the Prime Minister to reduce the prices of petrol and diesel went viral on Thursday.
Experts say it should not be difficult for the government if it follows consumer pricing logic. Sample this: Four years ago, international crude prices were at the $100 per barrel mark, whereas now they are around $80 per barrel.

But consumers in Mumbai are paying Rs 4.3 per litre more now, instead of getting the benefit of a reduction. This situation has come about because of a progressive increase in taxes. While the Centre increased excise duty by Rs 10 per litre, Maharashtra increased VAT and surcharge by Rs 6.97 per litre. The same is the case with diesel.

While its basic price for the oil companies fell by Rs 5.52 per litre in four years, Mumbaikars are paying a retail price of Rs 6.33 per litre more. This is because Central excise duty on diesel increased by Rs 11.77 per litre while state VAT and surcharge by Rs 1.84 per litre in this period.

Experts and dealers say that if GST is introduced at a rate of even 40%, the price of petrol will go down by Rs 29 while diesel by Rs 14. They want Union finance minister Arun Jaitley and petroleum minister Dharmendra Pradhan to take the GST initiative. Data and analysis prove that the highest-ever retail prices of petrol and diesel that are being experienced in the country at present have no relation with international geo-political matters, whether they be Iran sanctions or a reduction in crude oil production by OPEC. Experts say the only reason prices are so high is because of the central and state governments’ desire to levy the highest possible taxes on transport fuel to boost revenues.

 “It is all the more tempting for governments to do so because it is an easy way to fill state coffers,” says a transport expert. “If the prime minister and states’ chief ministers decide to give up a certain amount of taxes to extend relief to consumers and transporters, they can replace the existing multilayered transport fuel tax structure with GST,” said petroleum pricing expert and fuel dealer Kedar Chandak.

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