Can Govt withdraw all the levied taxes and then sell the petrol/diesel on the international price?

Disagree

India is a country of Hypocrites and power mongers who use and exploit the public . So the idea of selling at international price is not possible as many poor and middle class people will be affected and the so called friendly politicians will exploit it to their advantage. So a small tax  is required to be levied so that the private sector is also interested in this endeavour. Also if the petroleum products are sold at international prices then naturally there will be control and once control comes then there will be corruption.

If the fuel were to become cheap, you have to first say bye-bye to any advanced technologies appearing. They will make even less economical sense than today. So at present levels its giving more support to advanced technologies.

Then there is the problem where a millionaire is mis-using the subsidies. Subsidies that the government provides are for LPG and Kerosene. The other fuels are taxes. Petrol is taxed at about 70ps per rupee of fuel and diesel about 30ps per rupee of fuel.

As far as I know there might be a little over use of LPG by these people(millionaires) but i dont think they use Kerosene. In fact our railways, RTC's and defense might be the only companies/groups who might get diesel without taxes or very little tax. so no, very few millionaires will get fuel at tax free rates, leave along subsidized rates.

So every subsidy provided are for the AAM Admi(Common Man). He benefits most of it. The Kerosene is for small business and BPL family home use. LPG for the middle class families. The industry LPG cylinder and auto fuel are not subsidized.

Now to the topic, get rid of those taxes. Well like i said before lots of our infrastructure like roads, flyovers, airports, highways are built using those taxes. The beauty of taxing fuel is that as more cars run on road the more funding automatically goes for infrastructure. How they use that money is a different topic all together. If we cut off that supply either we loose infrastructure or the government is likely to charge that infrastructure fees else where. 

So what ever way we look at it we are gaining not loosing from this tax. Infact if you want your onion to be cheaper then Ill suggest government to charge some Rs.1 more on the fuel and use that to subsidize fuel for the recognized transport companies.

Onion prices are barely driven up by fuel prices its more to do with the governments control over onion markets. Its carefully kept so that the prices will fall only when the demand falls. The best part is that the hard working farmers barely get to enjoy that extra money we pay, to the vendors. We need specialized price controlling authorities to cover the price increase. Infact the better quality Wheat and Barley grown in India is often sold at lower prices in US. 

The subsidy should be targetted towards the BPL catagory and it should be ensured that it reaches them. Why should Diesel be available at subsidised rates for the high end cars like Benz, BMW etc costing more than a fortune?

The loss in sale of Diesel can be partially set off by levying higher ED on Diesel vehicles for personal use.( may be smaller cars can be exempted)

I will look at this from the people and government's point of view.

Suppose tomorrow they put 0% duty on all fuels. First a major source of income will drop off for the government. What will the government do to make up for that income. Charge more on income and products.

Now from the user. Sure will see a major drop in our expenses in the next few months but once the taxes go up we stop seeing the benefits.

From the economy point of view, we will see a massive deflation in the economy inf the first few days which means that Rs.1 could be equal to or higher than $1. But with that I cant imagine the complex reaction it will cause for the importers and exporters.

My take its a too short sighted view of things. Lets look at real solutions.

In this highly volatile market , where the recession still have its effect on the job market, the inflation is on its helm and the commodity prices are sky rocketting, As a common man of R K Laxman it becomes difficult to think about this for a goverment chosen by the pepole that it would start selling the petrol/diesel on the international price.

Government should not withdraw the subsidy particularly for LPG & Petrol since it is used by large majority of common people.If at all it has be market driven, it should be only to the higher tax brackets and not for middle class.Present identification of the poor is faulty and hence implementing only to the poor is not practical.However when subsidies are increased, government has to incur fiscal deficit which again will cause inflation and again the sufferer is middle class.Taxes for higher income group must be increased and all tax concessions to industries who have more than RS.100 crore income must not be given any tax breaks.Just like income tax slabs for individuals, corporates with higher income should be taxed at higher rates to cover fiscal deficit

I have been hesitant to answer this question referred by Ramnatha and Shikhaji(thanks to both of you) because this question is HUMONGOUS WITH MIND BOGGLING IMPLICATIONS AND TOUCHING EVERY FACET OF INDIAN LIFE.        `` Chidambaram said after the implementation of the new duty structure total excise duty on petrol would stand at 14.35 rupees per litre, while unbranded diesel would attract duty of 4.65 rupees per litre.``--------If this gives you a fair idea of what I am talking about! I mean EACH AND EVERY LITRE OF PETROL PURCHASED ANYWHERE IN THE COUNTRY CONTRIBUTES AT LEAST 14.35 RS TO THIS COUNTRY`S COFFERS.It is the single largest contributor dwarfing by far any of the outgo from oil-bonds.            With a huge budget deficiet staring at us,I do not see any possibility for the government to curtail this huge source of revenue.(To this end the govt has started thinking of reducing the huge Subsidy on kerosine and LPG which is a welcome step)

Intention behind imposition of taxes, duties etc on petroleum products are to controle its domestic comsumption, we are producing only one third of our consumption rest we depend on other countries, impot will effect adversly to our financial position internationally and there fore it is required to be controlled. Subsidy by government is required only for home consumption especially for law income group, it may de distributed through PDS. Fuel used for commercial purposes no tax cuts and subsidy from government is necessory. That area is not required to supported by the government, its price regulation is totally unwarrented.