Speaking to reporters, Mr Aiyar on Monday said the Centre had already acted by reducing the customs and the excise duties and now it wanted states to follow it up with a cut in sales tax. He had earlier written to states to slash sales tax. States charge 8% to 40% as sales tax.
Petrol and diesel prices have remained unchanged for about two months despite spiralling global crude and product prices. The government-owned oil companies had last increased the prices on July 31 by Rs 1.10 a litre for petrol and Rs 1.42 per litre for diesel. The increase was followed by a cut in customs and excise duties. The fortnightly price revision is due on October 31.
Officials claimed that retail prices for petrol are almost at the import parity level but diesel was being sold at Rs 1.50 a litre below the import price level.
Our prices are short of import parity price. Oil companies are losing heavily and unless prices are increased, the situation will remain grim, a senior oil industry official said.
The government is unlikely to heed to the oil companies request in view of the inflation rate inching towards 8% mark and any rise in petroleum prices add fuel at this point.
The petroleum and natural gas ministry had in July instructed us not to increase auto fuel prices. That order has not been withdrawn, the official said.