Oil's new challenge for tax reforms

With the Centre increasing reliance on tax revenue from oil, the inclusion of petrol and diesel under GST can be problematic

Retail prices of petrol and diesel are in the news. In some parts of the country, petrol’s retail selling price has crossed Rs 100 a litre. International crude oil prices have been rising over the past several weeks, and the increase in retail prices for petrol and diesel is a direct outcome of that.

But the focus has understandably shifted to the share of government taxes on these petroleum products, which rose rapidly in the last few years even as international crude oil prices fell. The government of the day decided to take advantage of the softening crude oil prices and