States can cut petrol price by Rs 2.65/litre by giving up additional gains: Report

NEW DELHI: States can cut petrol price by Rs 2.65 per litre and diesel by Rs 2 a litre if they decide to forego  potential additional gains out of high crude oil rates, an SBI report said today.

             “Our analysis shows that at the current crude prices and extending our analysis to 19 states (overall consumption share is 93 per cent), the states could have gained at least an additional Rs 18,728 crore of revenue (in 2018-19),” said SBI’s Ecowrap report.

             It further said that states earn an additional revenue of Rs 2,675 crore over and above the budget estimates for every USD 1/barrel increase in oil prices.

             “Given that these revenue if foregone will not impact states fiscal position, we estimate that on an average, states can cut petrol prices by Rs 2.65/litre and diesel by Rs 2/litre, if the entire revenue gain was to be neutralised. This is the most plausible scenario under the current circumstances,” the report said. (AGENCIES)

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