States earn more when fuel prices rise: FinMin

Nirmala Sitharaman promises help to boost economic recovery

The States and the Centre need to work out how to address people’s concern about high fuel prices, Finance and Corporate Affairs Minister Nirmala Sitharaman said on Saturday, reiterating that States earn more when basic oil prices rise. Stressing that India’s pandemic-affected economy is recovering, Ms. Sitharaman promised to provide any support that is required to spur the recovery further. “We see signs of recovery and hope the economy will recover and are willing to give any help that would be needed to push the recovery process more,” she said. On the issue of fuel prices, the Minister said: “I have given a lot of comment on it and Petroleum Ministry has also spoken about it. As regards fuel price, Centre as well as States tax fuel. Centre taxes at a fixed rate, States tax at ad valorem. So whenever there is an increase in the basic fuel price, the States’ ad valorem based taxes will also increase.”