Fuel Prices Linked To Global Oil Rates, Centre, States Have To Handle Issue: FM

Mumbai: Fuel prices hit an all-time high on Tuesday, following which Union Finance Minister Nirmala Sitharaman said the prices of petroleum products in the country depend on international oil rates and both the Center and states have to handle their rising cost issue together.

Addressing a press conference at the Chhattisgarh BJP office Kushabhau Thackeray complex here, he said the prices of petroleum products in India, a major consumer of these imported goods, depending on their prevailing rates in the global market.

Therefore, both the Center and the states have to handle the issue of fuel together as they levy tax on oil products, Sitharaman said.

She was replying to a question about the rising prices of petrol, diesel and LPG in the country.

Sitharaman said that India has to import almost 99 per cent of its requirement of petrol and diesel.

“Duty and tax on petrol and diesel are not levied only by the Centre. If we use 100 litres (of petrol or diesel), then we have to import 99 litres from abroad. Prices (of fuel products) are fixed here according to the oil prices abroad.

“When the rate changes in the (global oil) market, it affects us too. The Center levies a certain amount as tax and not as Value Added Tax (VAT). But state governments levy VAT (on petrol, diesel).”

Sitharaman said that rising fuel prices have certainly increased the financial burden on the common citizens.

“In this framework both the Center and the states levy taxes on petrol and diesel. I believe the prices are rising and there is definitely a burden on the common people. But both the Centre and states have to handle the issue, she added.

Petrol and diesel prices on Tuesday hit an all-time high as international oil prices rose again after hitting their highest level since 2014.

According to a price notification by state-owned fuel retailers issued in New Delhi, the price of petrol was hiked by 25 paise per litre and that of diesel by 30 paise.

This sent the petrol price in Delhi to its highest-ever level of Rs 102.64 a litre and to Rs 108.67 in Mumbai. Diesel rates, too, touched a record high of Rs 91.07 in Delhi and Rs 98.80 in Mumbai.

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