Petrol and diesel rates are increasing rapidly. What would happen if it keeps on increasing?
Answers
The primary reason for this recent spike is levying of higher taxation. While the Narendra Modi government at the centre has increased excise duty on petrol and diesel, several state governments have raised the value-added tax they charge.
Answer:
At a time when thousands of Indians are grappling with salary cuts and job losses, the centre and state governments in the country are increasing taxes charged on petrol, diesel and cooking gas to manage their own finances.
Petrol prices in India are currently at a 19-month high, while diesel is selling at its highest rate ever in some parts of the country. The prices of liquefied petroleum gas, which is used for cooking and engine fuel, have also been raised twice in two months. These rate increases are despite the fact that global crude oil prices are off their highs.The primary reason for this recent spike is levying of higher taxation. While the Narendra Modi government at the centre has increased excise duty on petrol and diesel, several state governments have raised the value-added tax they charge.
Currently, the governments are collecting more than 200% taxes on the base price of petrol and diesel, according to Mumbai-based credit ratings agency, CARE.
With the centre and states imposing higher taxes, retail fuel prices in India have surged
