Government earnings from fuel have skyrocketed despite a major fall in consumption. Retail prices have increased by around 39 times this year so far…
These are unpredictable times and frequent lockdowns and restrictions have meant that people moved out of their homes lesser and as a result there is a definite fall in consumption (of fuel).
At the same time there has been a consistent hike in excise duties on fuel by the Government. In the previous year, excise duty on petrol was raised from INR 19.98 per liter to INR 32.9. That is a whopping increment of 65 percent!
The Government was more mercieless on diesel. This fuel saw a spike in the excise from INR 15.83 a liter to INR 31.8 per liter – a mind-crashing increase of 100 percent!!!
This has been disclosed by the State Minister for Petroleum and Natural Gas Rameswar Teli in the Lok Sabha debate.
Most of these increments were done at a time when crude oil price was terribly low. In direct words, Government pocketed all the gains that were to go to the end customer (in the form of retail price reduction).
Even if we can gulp that down, what really hurts is the fact that when the crude oil price began to increase, the Government, instead of reducing the increased excise has let it pass onto the retail price and that is the biggest reason why you and I are paying highest-ever prices of petrol and diesel ever.
In total, the Indian government collected INR 3.35 Lac Crore in FYI 2020-21. In the previous financial year, the figure stood at INR 1.78 Lac Crore.
That means despite the consumption fall, Indian Government made a lot of money with petrol. Surprisingly, India sells fuel at a much lesser rate to some countries than to its own citizens!
The pricing of fuel varies from state to state due to the freight rates and VAT/Local levies. On a retail price of Rs 110, actual price of petrol is only around Rs 35 and the rest of it are various taxes by the state and central Government.
In this financial year, petrol price has increased 39 times whereas diesel was made dearer by 36 times.