Petrol, diesel prices hurting common man: Charts show how govt taxes are higher than fuel cost

Auto fuel prices are hitting the roof with the rise in international crude oil prices over the last few days. The Central government has come under fire from various quarters as many feel the high prices are due to the elevated tax rates. There has been calls for a reduction in taxes while the government is not yet committing such a step. Petrol and diesel do not come under GST, due to which the prices vary across states. [caption id=“attachment_3664669” align=“alignleft” width=“380”] Representational image. Reuters[/caption] Petrol and diesel prices over the last two-and-a-half months have risen more than Rs 7 and Rs 5.5, respectively, in Delhi. Meanwhile, the rise in Mumbai has been Rs 5.24 and Rs 3.90. In fact, the petrol price in Mumbai is at a three-year high of Rs 79.54 on Friday. The price rise has happened gradually over the last few days and because of this there has not been much protest against it. The government started daily price revision of petrol and diesel from 16 June this year. As a senior oil company executive told PTI recently, “Previously, everybody felt the pinch when rates would go up by Rs 2 or 3 per litre in one go. Now they are being increased by 1 paisa to 15 paise a litre everyday, hikes that have largely gone unnoticed.” However, with the prices now burning a hole in the pocket, the common man has started complaining. A look at the following charts shows higher taxes, highlighted in this Firstpost article , have definitely helped the government mop up huge revenue.

As per the data available on Indian Oil Corporation’s website, the cost of petrol is at Rs 34 in Delhi. On this, the government levies total taxes of Rs 36.5, taking fuel price for the consumer to Rs 70.43 per litre in Delhi (as on 15 September). This means the taxes on the product is more than its cost. Similarly, the cost of diesel is Rs 32.80, while the total tax incidence is Rs 26.02 per litre. It has to be remembered that the taxes have remained high for the last three years, when the Narendra Modi government has been in power.

Over three years, the government has mopped up Rs 12.8 lakh crore as tax revenue from petroleum product sales, mainly that of from petrol and diesel. In 2015-16 and 2016-17, growth in the government’s revenue from petroleum products was 25 percent each. This is much higher than earlier two years (2013-14 and 2014-15) when the growth stood around 9-10 percent each. 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 at 3.1 percent. In comparison, during 2012-15, the ratio was around 2.8 percent. Of the Rs 5.24 lakh crore, 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, denying the consumers full benefit of lower international crude oil prices that prevailed during the initial years. (With inputs from Rajesh Pandathil)