HomeRBI nudges government to cut taxes on petrol, diesel

RBI nudges government to cut taxes on petrol, diesel

Petrol, diesel prices have hit record highs across the country despite international crude prices not having risen as sharply.

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By CNBCTV18.com February 5, 2021, 11:36:59 AM IST (Updated)

RBI nudges government to cut taxes on petrol, diesel
The Monetary Policy Committee (MPC) in its statement noted that the sharp correction in food prices has improved the food price outlook, but also made the point that some pressures remained and that core inflation was high.


"Pump prices of petrol and diesel have reached historical highs. An unwinding of taxes on petroleum products by both the Centre and the states could ease the cost-push pressures," the MPC said in its statement.

Petrol and diesel prices have hit record highs across the country despite international crude prices not having risen as sharply. The main reason for the elevated fuel prices has to do with the excise duty levied on petrol and diesel.

"What is needed at this point is to create conditions that result in a durable disinflation. This is contingent also on proactive supply-side measures," the MPC noted.

It said that growth was recovering and that the outlook has improved significantly with the rollout of the vaccine programme in the country.

The MPC is positive on the announcements made in the Union Budget.

"The projected increase in capital expenditure augurs well for capacity creation thereby improving the prospects for growth and building credibility around the quality of expenditure. The recovery, however, is still to gather firm traction and hence continued policy support is crucial,” the MPC noted.
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