Nirmala Sitharaman speaks sense on fuel prices. Says Centre, States Should Work Together To Lower Fuel Prices

Amid roar over the raised fuel prices for the seventh time in row, the union finance minister Nirmala Sitharaman has said the Centre and the state should work together to lower the fuel prices.

For that she hopes that bringing petrol and diesel under the Goods and Services Tax (GST) might help. But that requires a thorough discussion in the GST Council (comprising Centre and the states), she said adding it might regulate the ever increasing prices and bring some homogeneity.

The FM was responding to a question post discussions on the Union Budget at Chennai Citizen's Forum today. She agreed that it was “Maha Bhanyankar Sankat” (mammoth problem) and that she is in dilemma on how to solve it. She said she is convinced that this issue on which no answer except for reducing the price will convince anyone.

She tried explaining that the fuel retailers, who were given pricing freedom over the years, decide retail rates on a daily depending on the international prices and foreign exchange rates’ benchmarks.

"Technically, the oil prices have been freed and the government has no control over it," she said, hoping international oil prices will come down, and finally help India have a lower fuel prices.

“If all this is the reality, it is the oil marketing companies who have to decide whether they have to cut the prices down or not because (technically), the oil prices have been freed, and the government has no control over it. It is the marketing companies that import the crude; refine it, distribute it and put the cost of logistics everything else," she attempted to explain, adding, "I am avoiding my answer. I am shifting the blame," she said.

She showed her helplessness saying that as a finance minister she cannot be one minister in the Union government to say how much the price can be decreased and whether that would not guarantee the States to earn more money. "Because every government needs more money, needs revenue and at the same time I can see a relief that not one additional paisa is being demanded from the taxpayers (from the budget)," she said diplomatically.

The finance minister said if the GST Council agrees on one rate then all over the country there can be one fuel price rather than Chennai being more expensive than New Delhi or New Delhi more expensive than Mumbai.