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Petrol prices jump to a four-year high

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Story Dated: Sunday, April 01, 2018 03:10 hrs UTC

The Centre remained a mute spectator as petrol prices jumped a four-year high of Rs 73.73 per litre in Delhi on Sunday and diesel rates climbed to an all-time high.

In between 2014-16, the government raised excise duty on the two fuels nine times saying that it would reduce the levy when prices go up significantly.

In February, the government had last abolished the additional excise duty on the fuels by Rs 6 but the effect was negated after a new road cess of Rs 8 per litre was introduced on the Union Budget day.

Since June last year, petrol prices are being revised on a day-to-day basis.

After crude oil prices started nearing $70 a barrel, the petroleum ministry had sought finance ministry's intervention to cut down the excise duty on petrol and diesel in the Budget. But Finance Minister Arun Jaitley's Budget did not effect any such cut.

The government has stopped short of bringing petrol and diesel under the Goods and Service Tax(GST) as it is the largest source of revenue for the state governments.

Petroleum products still attract state and central levies such as excise duty and value added tax (VAT). Experts have said that bringing petroleum in the GST could stabilize prices on the two fuels and bring petrol around Rs 50 per litre.

Prior to this when petrol prices had touched a high of Rs 73.31 per litre in Delhi in February, Petroleum Minister Dharmendra Pradhan had said the Centre had reduced the excise duty on petrol and diesel by Rs 2 on October and also requested the states to reduce the VAT.

However, only four states and one union territory had cut local sales tax or VAT on petrol and diesel since then.

The states which reduced VAT following the October 3, 2017, cut in excise duty were Maharashtra, Gujarat, Madhya Pradesh and Himachal Pradesh.

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