Petrol, Diesel Price Today: Prime Minister Narendra Modi’s government late Tuesday evening increased excise duty on petrol by a record Rs 10 per litre, and on diesel by Rs 13 per litre.
Petrol, Diesel Excise Duty Hike: Prime Minister Narendra Modi’s government late Tuesday evening increased excise duty on petrol by a record Rs 10 per litre, and on diesel by Rs 13 per litre. However, consumers may need not worry, as the retail prices of petrol and diesel at the pump will not rise, despite the massive tax hike. The three state-run oil marketing companies — Indian Oil Corp, BPCL and HPCL — will absorb the entire hike in the excise duty, PTI reported citing unidentified industry officials. The government will likely garner Rs 1.6 lakh crore from the hike, the report added.
The oil companies will make up for it by adjusting the hike against the recent fall in global crude oil prices. Oil companies in India have not cut petrol and diesel prices since 16 March 2020, despite global crude oil prices falling to lowest in two decades. Instead, the government has used low crude oil prices to its own advantage, by occasionally raising duties on petrol and diesel.
Earlier, in March, it raised the excise duty on petrol and diesel by Rs 3 per litre, to earn an additional estimated Rs 39,000 crore. Just earlier this week, the Delhi state government too raised VAT on petrol by Rs 1.67 litre, and on diesel by Rs 7.1 per litre. Earlier too, the governments at the centre and states, have used petrol and diesel as cash cows, raising duties to augment the exchequer’s tax revenue.
In India, the base price of petrol is only about 40% of its retail price, with the remaining being various central and state government taxes, duties and cess, and transportation costs. Amid the falling crude oil prices this year, the government is trying to collect more taxes from retail fuel, which can be used to offset other revenues losses.
Similarly, oil marketing companies too have so far not passed on the benefit to the retailers and consumers, and have instead used low crude oil prices to offset their own losses. Strict lockdown across the country has restricted the movement of vehicles, causing a severe slump in fuel demand. This has also caused tremendous loss to the oil marketing companies (OMCs).