March 8, 2021

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Fuel Price Hike: RBI Governor Shaktikanta Das Asks Govt To Cut Taxes On Petrol & Diesel

<p><strong>New Delhi:</strong> Reserve Bank of India Governor Shaktikanta Das called for reduced indirect taxes on petrol and diesel fuel to restrict sensitive fuel prices at a reasonable level. In India, the fuel prices witnessed a steep climb over the past week, with petrol price breaching the Rs 100 mark and diesel costing around Rs 90 in many cities. <strong>ALSO READ | <span style="color: #e03e2d;"><a style="color: #e03e2d;" href="https://news.abplive.com/news/india/disha-ravi-granted-bail-toolkit-case-disha-ravi-delhi-police-greta-thunberg-toolkit-google-doc-case-verdict-1445555">Activist Disha Ravi Granted Bail By Delhi Court In Greta Thunberg Toolkit Case</a></span></strong></p> <p>"CPI inflation excluding food and fuel remained elevated at 5.5% in December, due to inflationary impact of rising crude oil prices and high indirect tax rates on petrol and diesel, and pick-up in inflation of key goods and services, particularly in transport and health categories," RBI governor noted in the MPC minutes, published on Monday.</p> <p>According to Das, "calibrated unwinding" of taxes is necessary to reduce the economy's price pressures.</p> <p>"Proactive supply-side measures, particularly in enabling a calibrated unwinding of high indirect taxes on petrol and diesel - in a coordinated manner by center and states - are critical to contain further build-up of cost-pressures in the economy," said the RBI Governor.</p> <p>Taxes levied by the Center and the States account for over 60% of the cost of petrol and 54% of diesel price. In India, petrol and diesel prices are revised daily by the oil marketing companies according to international benchmark prices and foreign exchange rates.</p> <p><strong>ALSO READ | <span style="color: #e03e2d;"><a style="color: #e03e2d;" href="https://news.abplive.com/business/sbi-pension-loan-know-interest-rate-eligibility-other-details-1445527">SBI Pension Loan: Know Interest Rate, Eligibility &amp; Other Details</a></span></strong></p> <p>Even as states like Meghalaya, Rajasthan, Assam, and poll-bound West Bengal have reduced taxes on price-sensitive fuel, the central government has refused to cut excise duty despite the unprecedented rise in fuel prices in the past two months.</p> <p>It may be noted that the center had raised...

<p><strong>New Delhi:</strong> Reserve Bank of India Governor Shaktikanta Das called for reduced indirect taxes on petrol and diesel fuel to restrict sensitive fuel prices at a reasonable level. In India, the fuel prices witnessed a steep climb over the past week, with petrol price breaching the Rs 100 mark and diesel costing around Rs 90 in many cities. <strong>ALSO READ | <span style="color: #e03e2d;"><a style="color: #e03e2d;" href="https://news.abplive.com/news/india/disha-ravi-granted-bail-toolkit-case-disha-ravi-delhi-police-greta-thunberg-toolkit-google-doc-case-verdict-1445555">Activist Disha Ravi Granted Bail By Delhi Court In Greta Thunberg Toolkit Case</a></span></strong></p> <p>"CPI inflation excluding food and fuel remained elevated at 5.5% in December, due to inflationary impact of rising crude oil prices and high indirect tax rates on petrol and diesel, and pick-up in inflation of key goods and services, particularly in transport and health categories," RBI governor noted in the MPC minutes, published on Monday.</p> <p>According to Das, "calibrated unwinding" of taxes is necessary to reduce the economy’s price pressures.</p> <p>"Proactive supply-side measures, particularly in enabling a calibrated unwinding of high indirect taxes on petrol and diesel – in a coordinated manner by center and states – are critical to contain further build-up of cost-pressures in the economy," said the RBI Governor.</p> <p>Taxes levied by the Center and the States account for over 60% of the cost of petrol and 54% of diesel price. In India, petrol and diesel prices are revised daily by the oil marketing companies according to international benchmark prices and foreign exchange rates.</p> <p><strong>ALSO READ | <span style="color: #e03e2d;"><a style="color: #e03e2d;" href="https://news.abplive.com/business/sbi-pension-loan-know-interest-rate-eligibility-other-details-1445527">SBI Pension Loan: Know Interest Rate, Eligibility &amp; Other Details</a></span></strong></p> <p>Even as states like Meghalaya, Rajasthan, Assam, and poll-bound West Bengal have reduced taxes on price-sensitive fuel, the central government has refused to cut excise duty despite the unprecedented rise in fuel prices in the past two months.</p> <p>It may be noted that the center had raised excise duty by Rs 13 per liter on petrol and Rs 16 per liter on diesel from March-May 2020, after the national lockdown was announced in March 2020 and the crude oil price was hovering below $20 a barrel.</p> <p>RBI’s MPC members expressed the need to pursue an accommodative stance to ensure that economic recovery is tenser and broad-based.</p> <p>The MPC meeting minutes, which took place from 3 to 5 February, revealed that all six members also noted lower consumer inflation, which brightened the outlook even as upside risks remained.</p> <p>Last week, Finance Minister Nirmala Sitharaman said the Centre and State governments will have to work out together a mechanism to bring retail rates to reasonable levels.</p>

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