With excise duty being seen as a major reason for high prices of petrol and diesel, the Union Government may consider reducing it in the Budget 2018, which would be presented by Finance Minister Arun Jaitley on February 1.
The Oil Ministry is reportedly pushing for a cut in excise duty on petrol and diesel, the final decision, however, would be taken by the Finance Ministry.
The petrol and diesel prices do not come under the GST. Union Oil Minister Dharmendra Pradhan on Sunday said his ministry is trying to bring petrol and diesel under the purview of the Goods and Services Tax (GST).
The prices of petrol and diesel have a significant effect on the retail inflation. The fuel price has a direct impact on the selling price of almost every commodity in the market as high cost of fuel means that even the transportation cost would rise. India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for about 40-50 percent of the pump prices, said a Reuters report.
Petrol price in Mumbai surged to Rs 80.10 per litre on Monday followed by Kolkata which saw the second highest rate of petrol among metro cities. Since last year, the oil companies are changing petrol and diesel prices every day after the new dynamic system of fuel prices was introduced. Earlier, the prices of petrol and diesel changed fortnightly every month.