Petrol diesel Price Hike, Know why prices are not decreasing

petrol Pump

Petrol became costlier by 26 paise and diesel by 27 paise per liter today. Petrol has become costlier by Rs 3.47 and diesel by Rs 2.92 per liter in last 24 days of June. In view of the increase in the prices of crude in the international market, the general public is not expected to get relief from the inflation of these two products. Relief will also not be available because there is no consensus between the central and state governments to reduce the rate of duties on these two products. The BJP ruled state is also not ready to accept the suggestion of the Center to reduce the duty rate. There is a demand of the states that the excise duty should be cut by the Center first, then they will also reduce the rates of their duties. The Center fears that if it reduces the fee once at its level, the states will again go back on their promise.

Government sources say that the Petroleum Ministry’s assessment is that crude prices are not going to come down in the near future. The Indian government is in constant touch with the Organization of Oil Producing Countries (OPEC) but talks are not being made. India has recently started buying a lot of oil from the US, but in recent months, the price of US crude has started becoming more expensive than the market in Gulf countries. Seeing the possibility of further increase in the price, Indian oil companies have started buying more on-spot crude. But this will not give relief to the general public.

How will the public get relief?

The public will get relief only when there is a reduction in the tax rates levied by the Center and the states. According to the above sources, the trust between the Center and the states is not being established to reduce the duty. On behalf of the Center, this issue is being raised with the states at different levels, but the states are saying that the initiative should be taken by the central government first. Whereas the Center believes that if it reduces the duty, then the states will not reduce the rates of VAT again.

Know how much revenue the Center and the states got from petrol and diesel

The states are also referring to the drying up of other revenue collection resources due to Corona. States received a total amount of Rs 1,35,693 crore from Value Added Tax on petrol and diesel in the first nine months of the last financial year. Whereas the central government got revenue of Rs 2,63,351 crore in the period April to December, 2021 due to excise duty and other duties. In the current financial year, the revenue earned by the Center and the states from the petro sector is expected to increase significantly.

Know how much tax is being collected by the Center and the state on petrol and diesel

If we talk about Delhi, then on Thursday (June 24, 2021) the retail price of petrol has been Rs 96.66 per liter of which Rs 32.90 will go to the central government as revenue and Rs 22.31 to the state government. Similarly, the retail price of diesel is Rs 87.41 in which the center is collecting Rs 31.80 revenue and the state government is collecting Rs 12.74. This is the situation of all the states. In revenue, the VAT rate on petrol is 35 percent and on diesel 26 percent, in Uttar Pradesh, these two are 26.80 percent and 17.48 percent respectively, in Madhya Pradesh 33 percent and 23 percent, in Kerala 33.08 percent and 22.76 percent. Keep in mind that in the month of June itself, state-owned oil companies have made petrol and diesel costlier 13 times.

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