Petrol at Rs 75 and diesel Rs 68 a litre in FY22 if taxation shifts to GST: SBI Ecowrap

New Delhi, March 4 : Consumers can be spared from a rally in retail prices of petrol and diesel if the two auto fuels are brought under the GST regime, but lack of political will and hesitancy to let go a major source of revenue for governments is keeping the product prices one of the highest in the world, economists at SBI said on Thursday.
According to them, petrol prices could be as low as Rs 75 a litre and diesel Rs 68 a litre if the two fuels are brought under a uniform taxation system that GST provides.
The economists put across their views in the SBI Ecowrap report, which said that lower prices for petrol and diesel assume that crude oil is priced at $60 a barrel and the exchange rate is Rs 73 per dollar.
They said under the model made by them, the Centre and the states have a revenue deviation from budget estimates by only Rs 1 lakh crore or 0.4 per cent of GDP after adjusting for the increase in consumption with the intended price cut, but the relief offered to the consumers would be ‘enormous’.
Retail prices of petrol and diesel have been moving up steadily this year, reaching new highs with every increase. It has risen on 26 days this year with petrol rising by 7.46 per litre to climb to Rs 91.17 a litre in Delhi, while diesel increased by Rs 7.60 per litre to reach Rs 81.47 in the national capital.
The SBI Ecowrap report in its model on retail price for petrol and diesel under GST regime has also assumed (after assumptions on crude prices and dollar rate) transportation charges at Rs 7.25 for diesel and Rs 3.82 for petrol, dealer commission of Rs 2.53 for diesel and Rs 3.67 for petrol, cess of Rs 30 for petrol and Rs 20 for diesel, which will be divided equally between the Centre and the states, and GST rate at 28 per cent (also equally divided between states and Centre).