Why Petrol, Diesel Costlier: Petrol and diesel prices in the country are breaking records. Normal petrol has crossed Rs 100 per liter in Rajasthan’s Sriganga Nagar. While in some cities of Maharashtra and Madhya Pradesh, it is above or close to Rs 99 per liter. Petrol and diesel prices are increasing continuously and within 1 year, the price of oil has increased by 18 rupees per liter. During the last 6.5 years of the Modi government, oil prices remained high, while the prices of crude oil have come down by about 40 percent during this period. Due to various types of charges on tax, commission and oil, the common man has to pay about 4 times per liter of the price of crude oil.
Huge increase in 1 year
Talking about the last 1 year, according to the data of Petroleum Planning and Analysis Cell, on January 2020, the price of 1 liter crude oil was Rs 28.84 per liter. Then the price of 1 liter petrol was Rs 77.79 in Delhi. At the same time, on January 2021, the price of 1 liter of crude oil was Rs 25.20, while the price of 1 liter petrol crossed Rs 87 per liter. That is, petrol is getting expensive even when crude is cheap.
Even in April 2020, when the price of 1 liter crude oil fell below Rs 10, petrol was being sold in Delhi for Rs 73 per liter. There has been a steady increase in petrol and diesel since April. In June 2020, petrol came to around Rs 80 per liter, then in October 2020 it reached Rs 85 per liter. Petrol crossed Rs 86 in December 2020. Now in Delhi it is being sold for close to 88 rupees.
Why is the price 4 times the base price
Current Charges on Petrol
Base price: Rs 29.34 per liter
Freight cost 0.37 rupees
Excise duty Rs 32.98 per liter
VAT: Rs 19.92
Dealer’s commission: Rs 3.70
Price charge to dealers: Rs. 29.70
Current charges on diesel
Base price: Rs 30.55 per liter
Freight cost 0.34 rupees
Excise duty Rs 31.83 per liter
VAT: Rs 11.22
Dealer’s commission: Rs 2.54
Price charge to dealers: Rs. 30.89
Oil journey in 6.5 years
Crude international prices: $ 106 / barrel
Petrol Prices: (May 2014): Rs 71.41 / liter
Tax on Petrol: Rs 9.48 / liter
Tax on diesel: Rs 3.56 / liter
In the year 2021
Crude international prices: $ 60 / barrel
Petrol prices: (October 2020): Rs 87.57 / liter
Tax on Petrol: Rs 32.98 / liter
Tax on diesel: Rs 31.83 / liter
(Note: These figures are as of January 2021.)
That is, in the last 6.5 years, the price of crude has decreased by 40 percent, but petrol and diesel have increased by Rs 17 to 18 per liter. Even after the reduction in crude prices, the government has not given any relief to consumers in the price of petrol and diesel. Actually, during this time, while the government got the benefit of cheap crude, the government has increased its treasury by continuously increasing the tax on it.
Tax increased in Modi government
Let me tell you that when the Modi government was formed, around May 2014, the total tax on petrol was Rs 9.48 per liter and diesel was Rs 3.56 per liter. Since then, tax on petrol has increased to 32.98 per liter and tax on diesel is Rs 31.83 per liter. Due to continuous tax increase by the Central and State Governments, the planners are not getting the benefit of cheap crude, but they have to spend more for petrol and diesel.
1 rupee excise duty increase
Every rupee increase in the excise duty of petrol and diesel increases the central government exchequer by Rs 13,000-14,000 crore annually. At the same time, decreasing crude prices helps the government to reduce the trade deficit. In fact, India buys about 82 percent of its crude. In such a situation, the current account deficit (CAD) of the country may also decrease due to the decrease in crude prices.