GST Council meeting may try to douse the fuel price fire

Tomorrow's GST Council meeting, perhaps the last ahead of the Union Budget, is expected to offer some relief from soaring fuel prices and inflation fuelled by rising fuel prices.

Finance minister Arun Jaitley will hold key GST meeting on 18 January amidst an ongoing rally in fuel prices and renewed calls to the government to cut excise duty to cushion burden on common man.

The GST Council meeting comes after state-owned oil marketing companies raised retail prices of petrol by 12 paise and that of diesel by 18 paise per litre today, as they continued to hike fuel prices.

It is widely expected that in order to tame the soaring prices of petrol and diesel, the GST Council will take up fuel tax as the main issue.

However, any decision on bringing petrol and diesel under GST needs concurrence of states and any decision on this will depend on the willingness of the states to cut down on the VAT.

Last week, petroleum minister Dharmendra Pradhan had responded to questions on whether the centre would cut excise duty on the two fuels, by asking states to first cut VAT.

Petrol and diesel prices had breached the Rs70 and Rs60 marks respectively by Monday and is now selling at Rs79.15 per litre and Rs65.90 per litre in Mumbai, making the city India's most expensive city for motorists.

In Chennai, petrol is going for close to Rs74 per litre and diesel at Rs65.23 per litre. The corresponding figures for Bengaluru are Rs72.39/62.92 for a litre of petrol and diesel, respectively, while Kolkata posted prices of Rs74/Rs64.5 respectively. Delhiites are comparatively safe with petrol priced at Rs71.27 and diesel at Rs61.88 a litre.

The BJP-led government has cut excise duty only once during its tenure-but raised it nine times between November 2014 and January 2016.

In October 2017, when petrol price had reached Rs70.88 per litre in Delhi and diesel was priced at Rs59.14, the government had lowered excise duty by Rs2 per litre. But the central levy on fuels was still twice of what was charged three years ago.