The last two weeks have brought a sigh of relief for one and all in the country. Petrol and Diesel prices are slowly in decline and with the Festive season set to kick off the timing could not have been better. Following months of public and media backlash over rising fuel prices, the Central and States effort have finally proved effective if not soothing. For now, though, the Indians can bask into the festive mood little-relieved knowing that more than domestic it is rising international tensions that drove fuel prices up in the first place.
Just a few weeks back the petrol prices had peaked to reach Rs 90 per liter whereas diesel prices hovered around the Rs 80 per liter mark. Currently, petrol and diesel prices in Mumbai are down to Rs 85.24 and Rs 77.40. This is a drop of Rs 1.57 and Rs 1.06 respectively from last weeks rate.
Crude oil prices in International markets registered a not so significant yet small decline. However, a major contributor towards reduction on Indian soil was the reduction of Rs 1.50 per liter on excise duty on fuel prices by the Central Government. Further, Central Government ordered PSUs to provide an additional subsidy of Rs 1.0. This cumulatively reduced fuel prices by Rs 2.50 per liter.
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Moreover, as fuel is not under GST Ambit, the Central Government had requested State governments to follow suit and reduce state VAT on fuel. Accordingly, many states have reduced VAT on fuel leading to further reduction in fuel prices. All these factors have cumulatively combated the rising fuel prices. However, a bigger question that still remains unanswered is whether Fuel would be brought under the GST ambit to offer a more permanent solution than just temporary seasonal reliefs.