Agree fuel prices should be down: Finance Minister Nirmala Sitharaman

People shout slogans during a protest against the price hike of LPG and petrol, in Amritsar. Pic/AFP

Finance Minister Nirmala Sitharaman on Friday finally acknowledged that consumers have a case for petrol and diesel prices to be brought down. However, Sitharaman, who had increased central excise duty on petrol and diesel by a record margin last year to mop up gains arising from international oil prices plunging to a two-decade low, remained non-committal on taking the first step to cut central taxes to give relief to consumers.

She said a reduction in taxes should be a joint call of the central and state governments. As much as 60 per cent of the retail price of petrol, which has shot above R100-mark in some places in Rajasthan, Madhya Pradesh and Maharashtra and is at an all-time high elsewhere in the country, is made up of central and state taxes. Taxes make up for about 56 per cent of the record high diesel rates.

Nirmala Sitharaman

While the burden on the consumers is "understood", the pricing is a vexatious issue, she said. Stating that both states and the Centre draw revenue out of taxes levied on petrol and diesel, she said 41 per cent of the tax collections made by the Centre go to the states. "So there is an issue which is layered and as a result that has to be a matter ideally for the Centre and the states to talk about," she added.

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