Indians pay more for petrol and diesel than consumers in neighbouring countries.

The chart alongside shows diesel and petrol prices in a few countries in Asia as of 26 March.

The chief reason why retail prices differ is the imposition of various taxes and subsidies on these products. When global oil prices fell sharply a few years ago, the current government retained a good share of those benefits by increasing excise duties on petrol and diesel.

Oil prices are on an uptrend now. One way to lower retail fuel prices then, would be to take a cut in these duties. Alternatively, the government can also consider bringing these products under the ambit of the goods and services tax (GST), which is expected to lead to rationalization in pricing.

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