New Delhi/ Mumbai, Jan 23: The petroleum ministry is reportedly pushing for a cut in excise duty levied on petrol and diesel in the upcoming Budget 2018. Officials told a news agency that the the ministry is pushing for a tax cut to counterbalance rising fuel prices.

India is the country with highest retail prices of petrol and diesel in South Asia as 40-50 percent of the money goes in taxes.  A litre of petrol costs Rs 72.23, while diesel is priced at Rs 63.01. A senior official said that the oil ministry had just recommended and it was for the finance ministry to take a decision in this regard.

The government is currently battling low revenues due to the implementation of the Goods and Services Tax (GST). The fiscal gap is rising and the decision to cut excise duty might further widen the gap. In the year 2016/17, the sector contributed $81 billion to the state and central exchequer.

Finance Minister Arun Jaitley will present his last full budget before 2019 general elections. He is under pressure to balance popular aspirations with economic compulsions. Rising petrol prices can be a major issue for the government especially when their are major assembly elections lined up in 2018.