What Consumers Pay For Petrol, Diesel After Price Cuts

Arun Jaitley,Fuel price hike,Finance minister

The cut in fuel prices will cost the exchequer Rs 10,500 for the remaining half of this financial year

The BJP-government at the Centre had raised excise duty on petrol by Rs 11.77 a litre and that on diesel by Rs 13.47 a litre in nine installments between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October previous year by Rs 2 a litre.

The government lowered the excise duty by Rs 1.50 a litre and asked state-run oil marketers to cut price by Re 1 a litre. The Opposition said the cut announced on Thursday was too little, too late and argued that the reduction came because the BJP is staring at defeat in key state elections later this year. Oil marketing companies, simultaneously, will take a Re 1 per litre hit as well. "As the Government of India has already reduced the rate on petrol and diesel of Rs 2.50 per litre, thus the total benefit to the consumers (in Chandigarh) will be Rs 4 per litre on petrol and diesel", it said. Whereas Maharashtra government has not done any additional reduction on petrol price and Jharkhand also not slashed down the price. He accused the Modi government of a "Rs 13 trillion fuel loot" by imposing heavy excise duty on petrol and diesel in the last four years and the benefits of low global prices were not passed on to the people. Centre will issue notification on cut in excise duty by Thursday midnight so that consumers get immediate relief. It had asked them to spread the message of other welfare schemes of the Modi government, particularly its health insurance scheme.

The Chandigarh administration has reduced the value added tax (VAT) on petrol and diesel, an official release said in Chandigarh.

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The hike in duties in 2014-16 had led to excise collections from petro goods rising from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18.

Three BJP-ruled states - Rajasthan, Madhya Pradesh and Chhattisgarh - are scheduled to go to the polls later this year. Still, the petrol/diesel prices continue to skyrocket at much higher levels during Modi government, he contended. Government taxes are estimated to account for almost 40% of retail prices of petrol and diesel. The price of global crude oil today is 86 dollars per barrel.

While it may seem the Indian government certainly has room for slashing taxes further on fuels, the recent cut is estimated to cost the government ₹2.7 trillion.

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