In what came as a relief to common man, Union minister Prakash Javadekar on Saturday said that the central government is working to find a long-term solution to the issue of spiralling fuel prices.
In what came as a relief to common man, Union minister Prakash Javadekar on Saturday said that the central government is working to find a long-term solution to the issue of spiralling fuel prices.
He welcomed cooperation from states to share the fuel burden and said that they too levy taxes on petroleum products.
"During the Congress regime, petrol prices were deregularised and it was supported by Trinamool Congress. During our time the whole price set up was re-regularised but still the government is working with states for a long-term solution as they are equal stakeholders," Javadekar told reporters here.
"States levy taxes on fuel and therefore we all have to come together for a solution (to the price issue)," the minister for human resource development said.
Petrol prices were deregularised in June 2010 during the Congress-led United Progressive Alliance government under Manmohan Singh.
In June last year, oil companies decided to revise prices daily instead of fortnightly as per the international practice.
Meanwhile, Niti Aayog, the policy think tank of the government has reacted to the recent record hike in petrol prices. Speaking to The Indian Express, Rajiv Kumar, vice chairman, NITI Aayog, said that states need to take charge in trimming down the duties on the fuel.
"The states must cut their taxes because they have got ad valorem (percentage-based) taxes", he said.
"As the prices have gone up, they have been getting a windfall gain, which can hardly be continued. So they must reduce it below 27 per cent… a 3-4 percentage point cut is doable", he further added.
However, he also added that the Central government should also find the fiscal space and then cut the excise duties.
Cautioning the government, he also said that the government should make sure that it doesn’t do anything to weaken the nascent uptick in the economy, and simultaneously find enough fiscal space to absorb the higher oil price by attempting things not done in the past.
Earlier, the government may ask state-owned Oil and Natural Gas Corp (ONGC) to bear fuel subsidy to help cut petrol and diesel prices, sources told PTI.
The government does not want to cut excise duty and is looking at alternative means to reduce petrol and diesel prices that had on Tuesday touched an all-time high of Rs 78.43 per litre and Rs 69.31 a litre, respectively.
Oil producers ONGC and Oil India Ltd had till June 2015 made good as much as 40 per cent of the under-recoveries or subsidy arising out of selling fuel at below market price. The same subsidy sharing in some form is being brought back, they said.
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 "Petrol prices were deregularised in June 2010 during the Congress-led United Progressive Alliance government under Manmohan Sing")
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