Think tanks have recommended bringing petroleum products under the purview of the GST to bring down prices. The company meets about 70 percent of its oil needs through annual contracts deals, mainly with Middle Eastern producers. When global crude oil price was declining between November 2014 to February 2016, the government had raised excise duty on petrol and diesel by nine times to boost its revenue.
The centre may also give some relief in excise duty rates to give immediate relief to consumers.
States too would be asked to cut sales tax or VAT to show a visible impact on retail prices.
"NDA's policy of not passing the benefits of lower crude oil price (by imposing additional excise taxes) has helped finance various welfare measures, reduce fiscal deficit and check the inflation", he added.
Windfall tax, they said, is levied in some of the developed countries globally. In 2011, the United Kingdom raised the tax rate on North Sea oil and gas profits when the price rose above $75 a barrel. "The government will have to find a solution to this crisis", said RS Sharma, former chairman of ONGC.More news: North and South Korean leaders meet again at border
Soaring petrol and diesel prices may be causing a massive financial burden on people at large but there appears no respite in sight.
The surge in fuel prices is mainly attributed to the rise in crude oil price, depreciation of rupee against the United States dollar and the high excise duty levied on petrol and diesel.
Since the time the hiatus ended on 14 May, rates have gone up by Rs2.84 a litre in case of petrol and Rs2.60 in diesel.
While NDA succeeded in collecting additional revenues of ₹4.4 trillion during its four-year rule, the UPA had incurred a loss of ₹4.3 trillion by selling petrol and diesel below cost between 2005/06 to 2014/15, according to Dr. Shenoy. The Central tax on diesel has increased more than three-fold while the tax on petrol has doubled.
The union minister said the central government had in October previous year reduced the excise on fuel by Rs. 2 per litre keeping in view the interest of the poor people.