View: Inclusion of fuel under GST should be rule-based

As the Indian economy recovers from the Covid shock and climbs a slow grind higher, the unprecedented high retail price of petroleum products remains a concern. While international crude oil price (at around US$75 / barrel) today is nearly 50% lower than its all-time high in July 2008, India’s petrol and diesel prices are higher today by about 100% and 150% respectively since that time.

Taxes on petroleum products follow a complex structure involving central excise duty and a combination of various state level taxes (eg., cess, extra VAT, surcharge, ad valorem tax) that varies heavily across states.