A couple of days ago, Indian government raised the price of petrol by 9.2% and the price of diesel by 6.6%. The government also cut customs duty to 7.5% so that the price of fuel does not increase too much. Indian government took this measure to reduce the huge losses incurred by the state run oil companies as a result of the fact that the oil companies were importing oil at a higher price and then selling it at a lower price. The good thing is that the price of cooking gas and kerosene has not been increased since people with lower income use these products. However, it seems that many people are unhappy with the increase in price and left parties in the coalition government, have threatened to start protest against the price hike.
So, Indian government is now facing a big dilemma. On the one hand, the oil companies are losing too much money every day and on the other hand, the move to raise price has turned out to be an unpopular move. So, it seems that Indian government will have to cut back on the price rise of fuel at least partially. To me, the best solution for the time being is to remove all taxes on oil.
Do you agree with this idea?
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Oil prices is one area where the tax payer alone does not pay for everybody else (like salaries and health care). That obviously hurts the left....considering that only 2% of india pays taxes, raising prices at least makes the consumer pay. reducing excise would make the tax payer pay
Posted by: Anonymous | June 7, 2006 11:17 PM | Permalink to Comment