Parliamentary panel seeks reduction in fuel taxes as prices soar

Economic Time, March 21, 2021

The parliamentary panel on food and consumer affairs has recommended a cut in fuel taxes at a time when petrol and diesel prices, included by the government in the list of essential commodities, are at record high levels.

“The committee are (sic) of the opinion that the taxes levied on petroleum products, especially on petrol and diesel, are on the higher side and need a revision after making an evaluation of the prevailing pricing regime in the country and also making a comparative assessment of the same with systems prevailing in other countries,” the panel headed by TMC’s Sudip Bandopadhyay has said in its report submitted to Parliament on Friday.

The report echoes the sentiment of consumers, who have been clamouring for tax relief since petrol price shot past the Rs 100 per litre-mark in several cities on February 17 as high central taxes amped up the sharp rise in international crude price.

Petrol price would have exceeded Rs 103 per litre in Mumbai and hit a century across large parts of the country had the state-run fuel retailers not frozen price revisions since February 27, a day after assembly polls were announced in five states. Diesel, used by transporters and farmers, is also ruling above Rs 85 a litre in most parts. The report said between financial years 2010-11 and 2018-19, the Centre’s excise duty collection from petroproducts grew from Rs 76,547 crore to Rs 2.29 lakh crore, while customs duty collection increased from Rs 26,282 crore to Rs 39,123 crore.

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