Fuel prices spike but relief eludes
New Delhi: The Centre and most of the states are fighting shy of cutting taxes on petrol and diesel even as fuel prices continue to flare up to record levels.
Two states on Monday, however, bucked the trend- Rajasthan cut the tax on petrol and diesel by 4 per cent to 26 per cent and Andhra Pradesh by Rs 2 a litre. The others continue to pocket windfall revenue gains from the spike in global crude prices.
Motorists in Calcutta will now have to pay Rs 83.16 a litre for petrol and Rs 75.68 a litre for diesel after state-owned refiners hiked prices on Monday even as the Opposition led by the Congress observed a Bharat Bandh to protest the hike.
Since mid-August, petrol price has risen Rs 3.65 a litre and diesel Rs 4.06 per a litre as the rupee hit record lows against the dollar, making imports costlier.
Official data show the Centre's gross revenue collections from petroleum products rising steadily to a projected Rs 2.57 lakh crore in 2018-19 from Rs 1.05 lakh crore in 2014-15, accompanied by an increase in excise duties. Prior to this, in 2013-14, the gross revenue collection from petroleum, oil and lubricants was Rs 88,600 crore.
Finance ministry officials on Monday ruled out any cut in excise duty to provide relief to consumers. They expect global oil prices, which together with a drop in the value of the rupee have been fuelling the fuel price rise to record levels, would moderate in coming days.
"We will be able to lower taxes when we are able to increase compliance on income tax and the GST. Till then dependence on oil will continue," he said.
They said the spike in crude prices was due to global factors over which the government has little control. Even if the excise duty on petrol and diesel was cut by Rs 1 a litre, the revenue losses would be a staggering Rs 30,000 crore.
The BJP-led Rajasthan, which faces assembly polls later this year, cut the tax hours before the start of the opposition bandh. Later in the day, Andhra Pradesh cut taxes.
Almost half of the fuel price is made up of taxes. On every litre of petrol, the Centre takes away Rs 19.48 as excise duty; on diesel, it earns Rs 15.33 a litre as tax.