He mentioned that more than Rs 80 crore worth of social welfare schemes are being implemented with the revenue from such taxes, including the Prime Minister’s Garib Kalyan scheme, which offers free foodgrains to the beneficiaries. The Economic Times quoted a government official as saying that it was “worrying” that a major private refiner was exporting large quantities of oil at exorbitant profits, cutting off fuel dealers. This government intervention is also the reason why oil marketing companies have remained unchanged on petrol and diesel prices for the past 42 days, despite rising Brent crude prices and extreme volatility.
The retail pricing system in the country is based on daily international oil prices. But often this method does not work exactly. Fuel prices have remained unchanged for 137 days since November last year. After 16 days, the oil companies went silent again after raising fuel prices by around Rs. Oil companies can adjust the retail price of fuels on a daily basis in line with international prices. However, an oil ministry spokesman, who did not want to be named, said they were selling diesel at Rs 25-30 per liter and petrol at Rs 8-10 per liter.
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‘Oil companies should get paid, but not make excessive profits. If you are reaping the benefits, it is the job of the Sovereign to tax the profits or prevent them from reaping the benefits. If there is no stopping profiteering, then why have an elected government? ‘He said. He added that even if the fuel tax was reduced to a level before Kovid, there would be no major benefit to consumers as global prices are too high.
India, which meets 85 per cent of its oil demand through imports, is one of the weakest countries in Asia, suffering from rising oil prices. Fuel inflation is one of the main reasons for the rise in inflation in the country. Retail inflation hit an eight-year high of 7.79 per cent in April. Inflation based on the Consumer Price Index (CPI) was 6.95 per cent in March this year and 4.23 per cent in April 2021. In the current scenario, even if there is no big jump in fuel prices, slight rises are to be expected.
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