Rupee strong as ever, dollar creating problem: Oil minister Pradhan on rising fuel prices

Mangalore Today News Network

New Delhi, Sept 08, 2018 : On a day when fuel prices continued its journey northwards, petroleum minister Dharmendra Pradhan once again blamed international factors for the prevailing situation.

 

Petrol prices rose by 33 paise per litre while diesel prices surged by 44 paise across the country on Saturday. In the national capital, petrol prices breached the Rs 80 per litre mark for the first time ever. Since August 15, petrol prices have risen by Rs 3 per litre while diesel prices have seen an increase of Rs 3.50 to every litre. While the common man’s household budget has gone for a complete toss, Pradhan highlighted just why the government cannot do much in the matter.

"Due to 2 major external factors this unavoidable situation is there in market. American dollar is creating a unique and unavoidable situation which is not good for world’s economy also," he said. "Today, Indian currency is stronger as ever, in comparison to all other currencies. But how do we purchase oil? Through dollars. Today Dollar is, in a way, world’s biggest exchange currency. That is creating problem for us."

Interestingly, many analysts believe Indian currency’s current state is one of the reasons for the state of fuel prices. It is close to touching the 72 mark to one dollar.

For Pradhan, the problem has also been compounded by Organization Of Petroleum Exporting Countries (OPEC). "OPEC had assured world community that from July 1 they’ll produce 1 mn MT/day. As per July-August statistics, target isn’t being compiled. Issues of Iran, Venezuela and Turkey are creating pressure on production. These factors aren’t in India’s hands," he said.

Critics however have argued that blaming international factors alone is unfair as the government has not cut back on excise tax it levies on fuel. The government is pocketing close to Rs 20,000 crore input tax by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the Goods and Services Tax (GST). The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT).

Excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine instalments between November 2014 and January 2016 but there has been just one cut - in October of 2017 when it was reduced by Rs 2 per litre.

courtesy:Zeenews