The recent spurt in diesel price has hit the transport vehicle sector and industries relying on this petroleum product for operations. This coming at a time when the international petroleum prices are at their lowest, to which our domestic prices are linked. There has been a sharp hike in the domestic price because both the central and state governments, like Delhi, are trying to shore up revenue.
D.K. Srivastava, Chief Policy Advisor, EY India, points out that due to Covid-19 lockdown direct and indirect taxes are hardly contributing any revenue to the exchequer. “Petroleum is the only source through which some revenue can be grabbed,” says Srivastava, adding that once revenue collection improves in a couple of months, the prices of petroleum products could be eased.