"It is a 'dharam sankat (dilemma)', said Union Finance minister Nirmala Sitharaman on Thursday when asked about when prices of petrol and diesel will be reduced. Sitharaman said that the only way to find a solution to the rising petrol and diesel prices is that the Centre and states should hold a dialogue.
"I won't be able to say 'when'.. it is a ‘dharam sankat’ (dilemma)," she said at an event in Ahmedabad, according to news agency ANI.
"It's not just the cess. You have the excise duty of the Centre, then you have the VAT of the states. You are right when you say that the Centre earns more. Everything that the Centre earns, 40 per cent goes to states. So there's is no hiding the fact that there is revenue there. It is not just me, you ask any state. There is revenue there," ANI quoted her as saying further.
"There is revenue consideration, both by the Centre and states and that is why I strongly believe it is no longer competitive," she added.
"I agree that the end users should pay less for fuel. I concede that's where action has to be, let's see what we can do," Sitharaman opined.
Earlier on Thursday, RBI Governor Shaktikanta Das said there is a need for coordinated action between the centre and state governments to reduce taxes on petrol and diesel prices.
"There is a need for coordinated action between the centre and the states because there are inherent taxes levied by both," the governor said, adding that calibrated reduction of taxes is important.
He, however, said both the centre and the state governments have their revenue pressures and they are required to spend high sums of money to enable the country and the people to come out of the COVID-19 pandemic stress.
Petrol and diesel have increased sharply in the country over a period of time. The increase in the previous weeks has taken petrol to cross historic high levels of Rs 100 a litre in several cities. Petrol and diesel prices have increased more than 25 times this year.