New Delhi, Apr 11, 2018 : With petrol and diesel prices touching multi-year highs, the government has asked state-run oil companies not to increase retail diesel and petrol prices.
The government has also asked the companies to absorb a part of the losses due to recent recovery in global crude oil, reported bloomberg.com.
On April 1, petrol price hit a four-year high of Rs 73.73 a litre, while diesel rates touched an all-time high of Rs 64.58 in the national capital, renewing calls for the government to cut excise tax rates.
India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for half of the pump rates.
State-owned oil companies — Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation will have bear a loss of up to 1 rupee per litre on sale of diesel and petrol, said sources not willing to be identified.
India imports more than 80 percent of its annual crude oil requirement, and wants to see prices at about $50 a barrel in order to manage its finances better, said Oil Minister Dharmendra Pradhan.
HPCL is not aware of any directive from the government to absorb a part of the losses from higher crude prices, the company’s chairman, MK Surana, said on the sidelines of the International Energy Forum in New Delhi.
Petrol, diesel, natural gas, crude oil and jet fuel (ATF) are currently not included in GST, which essentially leads to producers not being able to set-off tax paid on inputs from final tax on product.
The Congress has demanded that petrol and diesel be brought under the Goods and Service Tax (GST) regime, and accused the Modi government of "betraying" the trust of the common people and "miserably failing" to curtail rise in fuel prices.
Noting that crude oil price had fallen from USD 108 in May 2014 to USD 77 in April 2018, former finance minister P Chidambaram asked, "Why are petrol and diesel prices today higher than prices in May 2014?"