High level of taxation widens divergence in diesel inflation in WPI, CPI

A steady increase in diesel prices has been pushing up inflation for consumers across India at a time they are grappling with a crippling second wave of the Covid-19 pandemic. Diesel retail prices are back to more than Rs 80 a litre in the national capital throughout this month and remain on an upward trajectory.

According to sector watchers, the prices will remain firm and, in the near term, will only taper if the Centre and state governments agree to trim taxes. Taxes continue to form a large chunk — comprising well over 50 per cent of the sale prices