Is there any difference between the IEP and the present committees recommendations on petroleum pricing?
In IEP, it was suggested that prices be market-driven and competitive. It also said there should not be much difference between taxes on different fuels. If you have any other objective like environment, then you can have different taxes. In most countries, the price difference between diesel and petrol is very small. In India [ Images ], the price difference is Rs 15. There should be a uniform duty but since petrol is one-fifth of diesel consumption, you can lower the duty on petrol by 80 per cent and increase the duty on diesel by 20 per cent. While this is a more rational thing to do, we have suggested a Rs 80,000 excise duty on diesel vehicles. If I raise the price of diesel, everybody pays a higher price – truckers, industry, railways, farmers – and that would increase the cost of transport. Whereas the price of diesel for owners of cars and SUVs is a personal cost. It is a question of acceptability. We are taxing petrol more because it is a tax on luxury. The same argument applie
