The Petrol and diesel prices in India are shooting up day by day and it seems that things are simply going out of hand. With the latest hike, petrol was sold at Rs 72.43 per litre in Delhi, the highest in three years. In August 2014, it cost Rs 72.51. In other metro cities like Kolkata, Mumbai, and Chennai, petrol was sold at Rs 75.13, Rs 80.30 and Rs 75.12 per litre respectively, also at over three-year high levels.

As prices of everyday commodities are intertwined with Oil Prices, it is indeed a serious cause of concern for the Modi government and a catalyst for price rise. Often it is said that India’s reliance on other countries for importing oil and the world market has been pivotal for such steep rise in prices. Now the question is whether the central government can give relief to the common people with regard to steep oil prices?

India’s daily consumption of crude oil is 4.5 million billion which is third highest globally after US and China. About 80% of oil consumption in India is dependent on oil import.

Before the decision to deregulate oil prices, the government was directly involved in the pricing. The case of deregulation has given rise to great inconvenience to the Indian middle class.

The high tax rates on petrol and diesel is a case of concern. For petrol, it is 48% of what people pay for central and state taxes. In case of diesel, the excise and VAT add up to a whopping 38.9%.The government has time and again clarified regarding that such taxes help to make money for other subsidies.

No doubt, it is important to include oil in GST list also. Nevertheless, the common people are at the receiving end and it is significantly important to explore new way outs to reduce the oil prices.