Why should Indians pay Rs 79 for petrol when price of petrol plus taxes cost only Rs 30.84?

Do states pay double the tax Centre is paying for fuel? Note true when one makes a closer look

New Delhi, September 13: The petrol prices are increasing everyday. In Mumbai, the price of petrol was increased to Rs 79.14 for a litre of petrol on Monday. It was the highest petrol price since August 2014. The petrol price was not so less in Delhi where it was Rs 70.03 that is the highest since January 2017.

According to reliable sources, in August 2014, petrol was at Rs 70 and India’s basket of international crude oil cost$103.86 (Rs 6,326.11) per barrel. And in September 2017 it decreased to $53.39 (Rs 3,418). Dharmendra Pradhan, the Petroleum Minister commented recently that the daily price revision system was in the interest of the customers. He added that Indians are paying the same amount as they were paying in 2014 although the crude oil prices were 85% higher then.

In the Narendra Modi government,the philosophy of economic reforms of the last two decades has merged with the duties of a good citizen. The middle class expects that there should no subsidies in this second innings of the National Democratic Alliance (NDA) at the Center. According to this government, India is repressed from becoming a developed nation by the subsidies given to the middle class. That is another point that our subsidies would hardly measure up to our global standards.

According to official sources, the cost of every litre of crude oil that goes to the refineries of the oil marketing companies like Indian Oil, Hindustan Petroleum, Bharat Petroleum is only Rs 21.50 as of September. Even the cost of refining that crude oil with taxes like like entry tax, refinery processing, landing cost and other operational costs, along with margins, Oil Marketing Company margin, transportation, freight cost etc all adds up to Rs 9.34.

It infers that the basic cost of petrol, even after the addition of refining cost should not be more than Rs 30.84. The rest amount is only tax. So, the public especially middle class is paying tax of around Rs 48.30 for every litre of petrol. As of records from media sources, between November 2014 and now, the Center increased the excise duty on petrol by 126%. When compared to the diesel price there is an excise duty of 374%, the fuel used by lakhs of truckers and farmers.

According to the reliable sources, the records in August indicates that there was an increase of 25% in filing of income-tax returns. That resulted in the increase of tax collection by 41%. It is said that the economic transaction has gone digital but why does the government have the open right to keep increasing the fuel prices by making taxes 79% of its total retail cost?

According to media reports, even the State Government has a large share in the hike of prices of petrol and diesel that is generated from the pockets of the public. But it was the agreement of the Center with the states to keep petrol and diesel prices out of the Goods and Services Tax (GST) system. This step was mainly taken with the aim of exploiting the public especially the middle class for many years to come.

The government has no open right to take advantage of any class for the benefit of development even though all the policies since coming to power have devastated the lives of millions. Previously in 2014 and 2015, the price of crude oil fell to a 12-year-low at less than $50, so the government’s decision to increase taxes on petrol and diesel could be accepted as the government was expected to do something good with that money.

On September 22, the public decided to protest against the hike in the fuel price in Kerala. The public all over the state decided to protest by wearing black apparel on that day, children would be witnessed wearing black ribbons with their uniforms all over the state. Hope, this step would bring some change in the high end price of petrol and diesel.

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