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RBI governor calls for Centre-state coordination to bring down fuel prices

Shaktikanta Das said the RBI will not pull out liquidity prematurely and stifle growth.pti (MINT_PRINT)Premium
Shaktikanta Das said the RBI will not pull out liquidity prematurely and stifle growth.pti (MINT_PRINT)

He stated it is understood that the governments have their revenue pressures and require high sums of money to enable the country to come out of the Covid-19 stress. However, high retail rates of fuel will also have an impact on the cost of other products

With fuel prices at a record high across the country, Reserve Bank of India governor Shaktikanta Das on Thursday emphasised the need for coordination between the Centre and state governments to reduce the indirect taxes on petrol and diesel.

"There is a need for coordinated action between the Centre and states to reduce taxes because there are indirect taxes levied by both of them," said Das.

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He stated it is understood that the governments have their revenue pressures and require high sums of money to enable the country to come out of the Covid-19 stress. However, high retail rates of fuel will also have an impact on the cost of other products.

"Diesel and petrol prices do have an impact on the cost side. They play as a cost-push factor across a range of activities. It's not just that passengers who use cars and bikes. High fuel prices also have an impact on the cost of manufacturing, transportation and other aspects," said the RBI governor.

"I am sure the state and central government will take a positive decision in a coordinated manner," he added.

Focus on indirect taxes

Das had earlier last week also called for reduced indirect taxes on petrol and diesel to contain the fuel prices at a reasonable level.

"Proactive supply-side measures, particularly in enabling a calibrated unwinding of high indirect taxes on petrol and diesel – in a co-ordinated manner by centre and states – are critical to contain further build-up of cost-pressures in the economy," he said.

Central and state taxes make up 60% of the retail selling price of petrol and over 54% of diesel.

Taxes cut

Earlier, five states have decided to cut down taxes on petrol, diesel and other motor spirits to provide relief to customers. The state are Nagaland, West Bengal, Assam, Meghalaya and Rajasthan.

Fuel prices today

The petrol and diesel prices in the country remained unchanged for the second consecutive day on Thursday.

They were last hiked on Tuesday when the rate of petrol was increased by 25 paise and diesel rates jumped up by 35 paise. The hike took the petrol price in Delhi to 90.83 per litre. Diesel rate climbed to 81.32 a litre. In Mumbai, petrol currently costs 97.34, while diesel is retailing at 88.44.


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