New Delhi, January 17: Soaring petrol prices are likely to remain a key issue of discussion at the GST Council meet ahead of the Union Budget which is scheduled on Thursday. The meeting will be headed by Finance Minister Arun Jaitley. Also Read - 'Open to Tweaking Inside And Outside Budget For Economic Growth', Says Nirmala Sitharaman

The Council in all likelihood may try to reach to a conclusion on this, however, a serious decision on this issue will depend upon the willingness of the states to cut down on the Value Added Tax (VAT). Also Read - Economy Not in Trouble; Green Shoots Visible: Finance Minister Nirmala Sitharaman

Earlier this month, Oil Minister Dharmendra Pradhan had also responded to a question on whether the Centre would cut excise duty on the two fuel, by asking states to first cut VAT. Also Read - Union Budget 2020: Confused Between Tax Exemption, Deduction And Rebate? Here's What to Know

Two of the most traded benchmark crude globally have risen the most since December 2014 – Brent touched USD 70.05 a barrel last week and WTI reached USD 64.77.

The increase in oil prices has also renewed calls to the government to cut excise duty to cushion burden on common man.

The BJP-led NDA government had cut excise duty only once – by Rs 2 per litre in October 2017 when petrol price had also reached Rs 70.88 per litre in Delhi and diesel was priced at Rs 59.14.

Due to excise duty cut, the diesel prices had come down on October 4, 2017, to Rs 56.89 and petrol prices to Rs 68.38. However, a subsequent rally has wiped away all the gains and prices have touched new highs.

On Wednesday morning, petrol prices were hiked by 12 paise and diesel prices were raised by 18 paise per litre today.

Diesel prices today touched a record high of Rs 62.06 per litre and petrol prices have crossed Rs 71 as international oil rates continue to rally.

In Delhi, petrol price today rose to Rs 71.39 per litre, the highest since August 2014, according to daily fuel price list of state-owned oil firms.

The GST Council is also likely to give nod to rationalisation of rates on over 60-70 items. Sources have said that the Council may also deliberate on whether or not real estate should be brought under the ambit of the taxation scheme.