Since petrol and diesel remain outside the ambit of Goods and Services Tax, states also levy hefty sales tax and value added tax (VAT).
According to SBI's Ecowrap report, states can cut petrol price by Rs 2.65 per litre and diesel by Rs 2 a litre if they decide to forego potential additional gains out of high crude oil rates. P.S: A ONE paisa cut is not a suitable response to the #FuelChallenge I threw you last week.
The Congress saying if this was Prime Minister Narendra Modi's idea of a "prank", it was "childish and in poor taste". And as they had to backtrack to the actual one paisa cut, people felt absolutely insulted. "All states, whether governed by BJP or opposition, should try to reduce fuel prices but each state has different priorities and responsibilities", Pradhan said. Prices soared to over ₹ 80/litre for petrol and ₹ 70/litre for diesel.
Indian state refiners on Wednesday announced a marginal cut in retail prices of the two fuels. The party supremo and West Bengal Chief Minister Mamata Banerjee had in a recent tweet expressed concern over the spiralling prices of petrol and diesel.
He also welcomed Kerala government's move of cutting the fuel price by Re 1 earlier in the day.
The Oil and Gas Regulatory Authority (OGRA) on Wednesday sent a summary to the power division suggesting increase in various petroleum products effective from June 1.
Once customers realised this, relief turned into frustration, with consumers taking to social media to target the government for its inability to keep prices down.
The Modi government came under attack from common people as well.