Mukherjee proposes reduction in central and state taxes on petro fuels

Finance minister Pranab Mukherjee today hinted that the central government might think of temporary reduction in the tax burden on petrol and other fuels if the state governments take the lead.

Central and state taxes add up to around 50 per cent of the price of petrol and any reduction in this would give great relief to customers reeling under high prices, the finance minister said while addressing an Assocham function.

He said he had suggested this to state chief ministers a temporary reduction in taxes could be considered till the price of crude oil reaches $90 a barrel.

''I have suggested to them that if you agree to reduce the tax burden temporarily say till crude prices come to $90 per barrel, Union government is ready to reduce duties,'' he said.

However, Mukherjee further said that taxes on petroleum products are an important source of revenue for the centre and the states.

''When situation is difficult, difficulties have to be shared by all stakeholders. It can not be passed on to only one stakeholder; otherwise there will be serious distortions.''