Slash fuel rates

It’s a fact when there is a hike in international prices, the government’s revenues increase proportionately as customs duty along with other central taxes are imposed. But when there is a fall in global crude prices, state-owned oil companies are still earning profit on petrol and diesel. The current petrol and diesel prices reflect crude at about $81/barrel from an average of $112.8 in March. The reduction in petroleum products should be based on calculations. Fuel prices have remained frozen since the rates were last cut on May 22 when the government reduced excise duty by ₹8 on petrol and ₹6 on diesel. A reduction in pump prices, when it happens, will help ease inflation. Lower crude prices will ease foreign exchange outflow to pay for oil imports currently pegged at 85% of demand, lifting some pressure on the current account deficit. This will have a positive impact on the rupee and government finances.

SK Khosla

Chandigarh