Fuel prices will be decreased, assures Central government

NEW DELHI: Increase in the prices of petrol and diesel have devastated the lives of common people. Giving some respite to common people, the Central government has now declared to cut off tax worth Rs 5 to lessen the burden of the common man.

According to the analytics of Bank of America, the price of crude oil in the global market is estimated to be around $60 per barrel. The analysts at BOFA stated that fiscal deficit estimates have increased by 30 basis points to 7.5% of GDP for the financial year 2022, which means the oil tax will be cut by up to Rs 5 per litre. If Rs 5 per litre will be cut on petrol and diesel, then it will increase the burden of the Central government by Rs 71,760 crore.

The price of crude oil imported in India is around 62 dollars per barrel and in the year 2020, it was 50 dollars per barrel. The global increase in the demand for crude oil and production cut by OPEC has led to a rise in the price of crude oil. In the financial year 2020-2021, the price of crude oil was 19 to 44 dollars per barrel during which India’s crude oil import reduced from 57 per cent to 22.5 billion dollars yearly.

Bank of America stated, “For the financial year 2022, we have kept the economic growth rate at 9 per cent only. The tax on fuel prices will increase consumption. During this period, the high fiscal deficit will help reduce the impact on the yield.”

RBI increased estimates in open market operations

The brokerage firm increased the estimates from 9 billion dollars to 48 billion dollars of open market operations of the Reserve Bank of India.

Petrol price increased up to 5.23 per litre in a month

In the capital, New Delhi price of petrol per litre was Rs. 90.93 on Thursday. With the increase in the price of crude oil in the global market, oil marketing companies have also increased the price of fuel rapidly.

The Central government charges a total of Rs 32.98 per litre of petrol in the name of basic excise, surcharge, agri-infra cess, and road/infra cess. On diesel, it is 31.83 per litre. The surcharge was increased by Rs 13 on petrol and Rs 16 on diesel in March and May last year.

To reduce the effect of agri-infra cess, the surcharge is being cut by Rs. 1 on petrol and diesel which is implemented by February 1, 2021. At present, the basic excise duty on petrol per litre is Rs1.4 and on diesel per litre is Rs 1.8.