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The Union government is reportedly contemplating a possible cut in duties on petrol and diesel. While the desire to respond to political pressure regarding high fuel prices is understandable, given the headlines surrounding petrol prices hitting three figures in some parts of the country, the government must not give in. Any change in the petrol taxation regime should be focused on rationalising taxes and sharing revenues with the state, not on reducing the final price.
One important reason for standing firm is political. The government has consistently made the case that consumers should not complain about high petrol and diesel prices,
