Petrol, Diesel price: Will fuel rates be cut? What RBI Governor Shaktikanta Das has to say

Petrol, Diesel price has been on the rise affecting people's wallet adversely. However, there is a piece of good news for petrol, diesel users in India. The Reserve Bank of India (RBI) Governor Shaktikanta Das has suggested that indirect taxes be reduced. It is because of these that petrol, diesel prices in India are high. 

In the Monetary Policy Committee (MPC) minutes RBI Governor Shaktikanta Das has said that in December 2020, Consumer Price Index (CPI) — excluding food and fuel prices — has remained at 5.5 per cent. He said that rising crude oil price is one of the major reasons for rise in petrol, diesel prices in India. Das said that rising petrol and diesel prices have led to a rise in the transportation cost that has put pressure on all segments of the national economy.

RBI Governor Shaktikanta Das went on to add that some of the state governments have started to reduce indirect taxes levied by them. If other state governments follow suit, then not just in one state but across India, fuel prices will get controlled. He shared his suggestion and said that other states should also cut down VAT on petrol and diesel and help petrol, diesel prices come down.

Role of taxes in petrol, diesel price rise
Currently, about 60 per cent of petrol price is in the form of taxes being levied by both central government and the various state governments. Similarly, when it comes to diesel price, the amount of tax is some 54 per cent.

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Four States reduce VAT
There are four such states that have cut down VAT on petrol and diesel — Assam, Meghalaya, West Bengal and Rajasthan. The Rajasthan Government has reduced VAT on petrol and diesel from 38 per cent to 36 per cent. Assam Government has waived off COVID cess of Rs 5 tax on both petrol and diesel. but, the biggest relief has come from the Meghalaya Government, which has cut price by Rs 7.40 per litre on petrol and Rs 7.10 per litre on diesel price.