States, oil companies should take initiatives to reduce fuel prices

- Oil companies should not make too much profit

- After the war in Ukraine, the prices of petrol and diesel in the country have not been based on the market. Retail prices of petrol and diesel have remained unchanged for the past one year

Mumbai: State governments and oil marketing companies should take appropriate measures to help bring down fuel prices at home, said Asima Goyal, one of the three external members of the Reserve Bank of India's (RBI) Monetary Policy Committee.

In an interview to a TV channel, he said that the state governments which have never cut taxes should definitely do so. Oil companies should not make excessive profits. We are in a market driven system where changes in international crude oil prices have to be linked to domestic prices. However, the system has been put on hold due to the Ukraine war, which should be resumed in phases.

Retail prices of petrol and diesel in most states of the country have remained unchanged for the past one year. Crude oil prices, which averaged $116 per barrel in June last year, fell to $75 in June of the current year and have now reached $86. In retail inflation, fuel and power category inflation fell below four per cent for the second month in a row in July.

In May 2022, the Center reduced the excise duty on petrol and diesel by Rs 8 and Rs 6 per litre. In November 2021, the excise duty on petrol was reduced by Rs 5 and the excise duty on diesel was reduced by Rs 10.

Excise duty collection remains a large share in the revenue of the Centre. In the current financial year, the Center expects to earn Rs 3.39 lakh crore through excise duty, which was Rs 3.19 lakh crore in the last financial year.