Deora asks states to reduce fuel sales tax

In a bid to lower the impact of an unavoidable hike in petrol and diesel fuel prices, India’s Oil Minister Murli Deora has asked states like Delhi and Andhra Pradesh to lower their sales tax (VAT) on auto fuels and shift towards specific rates. As the government is considering freeing petrol and diesel fuel prices, which may result in a rate hike of up to Rs3.80 (US$0.08) a liter, Deora has written to state chief ministers seeking the reduction and rationalization of their respective state sales tax. An empowered group of ministers, headed by Finance Minister Pranab Mukherjee, is deliberating on freeing petrol and diesel prices from the government control. If approved, petrol prices will go up by Rs3.73 (US$0.08) a liter and diesel fuel by Rs3.80 (US$0.08) per liter. (June 22, 2010)