Petro products are price-sensitive, as these constitute key inputs to private consumption, industrial production, and public transportation. Petro prices have global linkage and exhibit high volatility. A quantitative and historical analysis of taxes on petroleum products in India, which is largely import-dependent, is undertaken, as the tax component constitutes 40%–50% of the retail price. During 2015–16 and 2016–17, the government could have reduced tax rates on petrol and diesel, but it did not, probably because of the wider considerations of fiscal balance and development imperatives.
