Fuel prices across the country continued to climb an upward graph on Thursday with petrol touching Rs 77.47 per litre in the national capital.
In India, petrol is the costliest in Mumbai where high local taxes has led a price of Rs 85.29 per litre, Rs 80.42 in Chennai and Rs 80.12 per litre in Kolkata. Whatever move the government makes over this issue shall surely be interesting to watch in near future considering that the BJP is in power in 20 states, other state elections are coming up this year and even Modi government does not have long time left in office. The cut is likely to be in the range of Rs 2 to Rs 4 a litre, they added. Presently, the central government levies Rs 19.48 a litre of excise duty on petrol and Rs 15.33 per litre on diesel. The prices came into effect at 6 am today.
In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped governments excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
The current Narendra Modi regime has gained significantly in the past two years, the prices of the crude oil were extremely low that allowed the government to raise the excise duty 9 times.
M. K. Surana, chairman of state-run fuel retailer and refiner Hindustan Petroleum Corp, said the government should review taxation of petrol and diesel to provide relief to the customer.
As per the revenue collection projections of the Union finance ministry, the government hopes to generate over Rs 2.579 lakh crore by the end of this fiscal by levying taxes on petroleum products alone, a massive jump from the gross revenue collection of Rs 88,600 crore in 2013-14.
Apparently, the OPEC has passed a unilateral decision of reducing the production of crude oils raising their prices in the global market to as much as 80$ per barrel which has increased its demand than its supply. Rates were revised on fortnightly basis but not all of the desired hike was passed on to the consumers and that increase not passed on converted into subsidy. Also, with rising consumption of fuel, the volumes or the overall refining capacity of OMCs have gone up.
How have taxes accounted for the rise in price of crude oil in India?
There are indications that a cut in excise duty, combined with States being asked to reduce Value-Added Tax, is on the cards.