(HT)
Even as petrol and diesel prices are scaling new highs every day, minister of petroleum and natural gas Dharmendra Pradhan Wednesday said reducing taxes on these items will not have any lasting impact due to the continuing volatility in crude prices.
Petrol prices have crossed Rs 90 a litre in many states while diesel is selling at over Rs 80 a litre, due to high VAT rates that states charge on these items. While Maharashtra has the highest VAT on oil products in the country to the tune of over 39 %, making almost 53 per cent of the price that a motorist pays is taxes, Goa, Delhi and Chandigarh have the lowest VAT rates.
Ahead of the US sanctions, kicking in from November 4 on Iran, crude prices have been on an upward spiral and Brent–the benchmark price for the Indian crude basket–is trading over USD 80 a barrel now. Compounding the matter, the rupee has been plumbing new lows having already touched the 73 mark last week. Since the beginning of this January, crude has rallied over 30 %, when the rupee has lost almost 15 per cent. The country meets 82 % of its oil demand through imports. Blaming global factors for the skyrocketing prices of petroleum products in the country, Pradhan said reducing taxes on oil products by the Centre and the states will not have any lasting impact due to the volatility in crude prices.
