"We also estimate that since the states have an incremental revenue over the budgeted one, they could cut on average petrol prices by Rs 3.20 /litre and diesel by Rs 2.30/ litre, without affecting their revenue arithmetic", the report, authored by Soumya Kanti Ghosh, Group Chief Economic Adviser of State Bank of India, said.
As many as 21 political parties partook in the Bharat Bandh yesterday, which was initiated by Congress and other leading Opposition parties.
Other regional parties who opposed the price hike but didn't lend support to the bandh, including the Aam Aadmi Party. He extended his support to the nationwide protest against rising fuel prices.
The Central government had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October previous year by Rs 2 a litre. He said that the statement is far from the truth and misleads people. In Hyderabad, petrol costs Rs 85.75 and diesel Rs 79.37. Diesel is at Rs 78.14.
She said that while Value-Added Tax on petrol was 30 percent, it was 22 percent on diesel.
The bench was hearing a PIL by Delhi-based designer, Puja Mahajan, challenging the daily rise in fuel rates and seeking a direction to the Centre to fix a fair price for petrol and diesel by treating them as essential commodities. The central government charges an excise duty of Rs 19.48 per litre of petrol and Rs 15.33 per litre on diesel.
Petrol was selling at Rs 82.95 in Kochi on Tuesday, and diesel at Rs 76.95.
"Instead of fixing a fair price, the government has delegated the powers to Oil Manufacturing Companies (OMC) and this kind of procedure being followed by the government is unconstitutional, illegal and contrary to the mandate of the Section 3 (1) of the Essential Commodities Act", the plea read.