Petrol, diesel prices at record high: Two tables show how government taxes have made fuel costlier nationwide

Auto fuel prices have gone through the roof, on the back of higher international crude oil prices, over the last few days. The Narendra Modi-led government is taking a lot of flak from various quarters, because many feel that costlier petrol and diesel are due to elevated tax rates.  Over the past 12 days, petrol prices have increased by up to Rs 3.37 per litre, while diesel prices are up by Rs 3.02 in four metros. There is now a growing public clamour for a reduction in taxes, but neither New Delhi nor the states have committed to such a step. Petrol and diesel do not come under the Goods and Services Tax (GST), and therefore fuel prices vary across states. Petrol Petrol retailed at Rs 85.65 a litre in Mumbai on Friday. Fuel costs the most in the financial capital. [caption id=“attachment_4185565” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] The price of the fuel is already at an all-time high in Mumbai, along with Delhi and Chennai, and is now creating new benchmarks with each passing day. In Delhi and Chennai, petrol is selling at for Rs 77.83 and Rs 80.80 per litre respectively, according to Indian Oil Corp (IOC) data. On Friday, petrol was selling at Rs 80.47 per litre in Kolkata. The city of joy joined the club on Thursday, when petrol sold at Rs 80.12 a litre, the highest in nearly four years. The persistent rise in transport fuel prices is largely attributed to the surge in crude oil prices and high excise duty. The price of Brent crude oil, the global benchmark, is currently at over $79 per barrel. Diesel Diesel prices, which have already hit unprecedented levels, set new records across the country. In Delhi, Kolkata, Mumbai and Chennai, it is selling at Rs 68.75, Rs 71.30, Rs 73.20 and Rs 72.58 per litre respectively. Diesel, to a large extent, drives the Indian economy and surging prices are now burning holes in pockets. It must be mentioned here that the government permitted daily price revisions of petrol and diesel in June 2017, to help state-run oil marketing companies (OMCs) cut losses. These two charts clearly show that higher taxes, highlighted in this Firstpost article , have definitely helped the government mop up a lot of revenue.

As per IOC data, petrol is priced at Rs 41.80 per litre in Delhi. On this, the government levies Rs 36.03 in taxes, pushing the fuel’s retail price to Rs 77.83 per litre in the national capital, as on 25 May. Taxes on the product work out to 86 percent of the cost. Similarly, diesel is priced at Rs 43.31, and the total tax incidence is Rs 25.44 per litre. Taxes on the product work out to 59 percent of the cost. It has to be remembered that taxes have remained on higher side for the last four years i.e. throughout the Narendra Modi regime..

The four-year old NDA government has mopped up Rs 16.57 lakh crore as tax revenue from petroleum product sales, mainly from petrol and diesel. In financial year 2016-17 and in fiscal 2015-16, growth in the government’s revenue from petroleum products was 25 percent each. This is much higher than in 2014-15 and 2013-14, when growth stood at around 9-10 percent each. 2017-18’s data is available up to December 2017 only and hence is not comparable with the preceding year. In 2016-17, the government’s revenue from the petroleum sector was Rs 5.24 lakh crore, accounting for 3.5 percent of GDP. In the preceding year, the ratio was 3.1 percent. By comparison, during 2012-15, the ratio was around 2.8 percent. Of the Rs 5.24 lakh crore, the central government’s excise duty constitutes Rs 2.43 lakh crore or 46 percent. The state government’s sales tax and VAT account for Rs 1.66 lakh crore or 32 percent. Clearly, the NDA government has been milking the sector for higher tax revenues, and has denied consumers the benefit of lower international crude oil prices that prevailed around the time that the NDA assumed power. (With inputs from IANS)