Lower crude prices boon for Indian economy
PHD Chamber of Commerce and Industry has suggested the Government to Reduce Excise duty and VAT on Petroleum and Diesel Products by 25% to bring down the prices by Rs.9-10 per litre
Prices of the petroleum products should be in sync with the deceleration in the international crude oil prices. All the movement in the International crude oil prices must be captured and implemented in the domestic prices in the same way, said Dr D K Aggarwal, President, PHD Chamber, in a press statement issued on 11 Mar 2020.
World economic environment has turned very dynamic and there is a drastic fall in the international crude oil prices and this can be a boon for the Indian economy as inflationary conditions will be benign and price cost margin of the businesses will improve, Dr D K Aggarwal pointed out.
The international crude oil prices have been declining significantly from US$63.27 per barrel as on 6 January 2020 to US$31.13 per barrel as on 9 March 2020.
But petrol prices in India (Delhi) has decreased only from Rs.75.69 to Rs.70.59 during the same period.
This means significant 50% fall in the international crude oil prices has only resulted by a 7% decline in the domestic petrol prices, said Dr Aggarwal.
The build-up of petroleum product prices because of various taxes, duties and commissions (fixed excise duties at Rs.19.98/Litre and VAT at Rs.15.25/Litre in Delhi) is so high that any significant crude oil price decline is also not reflected in the prices of petroleum products in India, said Dr Aggarwal.
As the economy faces a slowdown, because of the banking and NBFC crisis in 2019, now the impact of Coronavirus may affect the recovery process that are expected from the April quarter, said Dr Aggarwal.
“At this juncture, we suggests to reduce Excise duties and VAT on petroleum, diesel and allied products by at least 25%, to bring down the prices of petroleum products, which will be a big relief to the industry, will boost and kick start economic growth, while reviving the spirit in the economy,” said Dr Aggarwal.
This reduction in Excise and VAT would reduce the prices of petrol and diesel by Rs.9-10 per litre.
“We strongly believe that these reduced prices will help lower inflation, boost consumer spending, make Indian industry competitive and will boost overall revenue and benefit government, industry and economy,” said Dr Aggarwal. fiinews.com
