As the fuel prices are touching historic heights in India. Thus, RBI interferes in between and urged the Centre and state governments to reduce the prices of petrol and diesel. There is 60% of indirect taxes on petrol and 54% in the case of diesel by the central and local government.
Therefore, the stride in fuel prices could burn the pocket of the common man, thus the governor of the RBI(shaktikanta das) has raised his attention on this subject.
According to the monetary policy meetings on Monday, the governor said ‘’calibrated unwinding’’ of the taxes is necessary to reduce the price pressure from the economy.
‘’CPI inflation, excluding food and fuel remains elevated at 5.5% in December’’, due to the inflationary impact of rising crude oil rising and indirect taxes on petrol and diesel. Hence, these pick-ups the inflation of key goods and services, particularly health and transport categories. Das added that the high indirect taxes on petrol and diesel are critical in building the cost – pressure in the economy. Furthermore, the hike in fuel prices directly affects the budgets of the common man’s household.