The Oil Scam in India?

The Global crude oil prices are soaring. Which means the Indian petrol/diesel prices will also increase substantially over a period of time. Petrol is already very costly here - around or more than 50 Rs. a litre. If these fuels' price increase, so does the inflation. And then it leads to an increase in the gap between the rich and the poor.

I was really surprised on reading one article in the newspaper Sakal. It said that if we remove all the central tax, state tax and excise duty from the Petrol prices, the rate per litre will come down to half! Isn't it amazing? It leads to the obvious question - Is it justified to tax the most sensitive commodity so heavily? That too in a predominantly poor/developing country?

I am not an expert economist. But I still think that taxing almost 100% of the petrol price is just way too much considering the spiralling effect it has on the overall prices/inflation. Agreed that the government needs money and taxes to run the nation. But should it come at the cost of every citizen including the poorest of poor?

And now, some state governments are claiming fame by not taxing the increased amount of 4Rs per liter of Petrol. But what about the 25 Rs or so that they are already taxing? Add to that the chaoitc handling of the issue by all state governments! Some states want the citizens to bear this additional burden. Why is there no central control of the state taxes especially for such an important item like oil?

I really think that the government should look at other ways to earn money rather than taxing the common man in such a rampant manner. If the inflation goes out of hand, the poor will become poorer. The rich keep getting richer anyways.

Let me know your thoughts.
- Ashutosh