Since May 14th, petrol prices in Delhi have risen by Rs 2.07 per litre to nearly Rs 77 per litre. It is much worse in Mumbai with a litre of petrol costing almost Rs 85 today. The other metros have witnessed a similar fate.
Diesel prices have also faced a similar fate. Prices in Mumbai have risen Rs 2.04 in the last week. Chennai is a little worse off.
So who should bear the burden? The centre, the states, the oil companies, the dealers or the consumer.
Kirit Parikh, chairman of IRADe, believes that the government should cut down the taxes and certainly excise duty should be cut down. The states should have more of a responsibilities to cut down their VAT because “VAT that states impose is a ad valorem tax and therefore whenever the cost of diesel goes up their income go up. So state can easily cut down the VAT rates without affecting their revenue from these.”
Former oil secretary Saurabh Chandra is of the view that Central Government should reduce excise by Rs 1 or 2 and prevail upon the state governments to cut the VAT rate.