Special Report: The Crude Truth Behind Rising Fuel Prices

by GoNews Desk 3 years ago Views 2142

Special Report: The Crude Truth Behind Rising Fuel
Daily rising prices of petrol and diesel have become a new problem in the country already battling the Coronavirus pandemic. Although the price of crude oil in the international market is at a record low still the fuel prices in the country is increasing instead of decreasing. In fact, there are two main reasons behind this: first, the excise duty levied by the Central Government and second, no reduction in both VAT and fixed by the State Government, due to which petrol and diesel become costlier.

According to Care Ratings, an organisation that researches various sectors of the economy, the Central Government collects twice the actual price of oil from common man’s pocket i.e. 200 percent.

To run a petrol pump, petrol is given at Rs 22 and diesel at Rs 23 per litre. Then it gets excise duty which is Rs 33 for petrol and Rs 32 for diesel. After this, the petrol pump owner's commission is Rs 4 on petrol and Rs 3 per litre on diesel. After this, the State Government adds its VAT which is currently Rs 18 per litre for both. Summing up, the price of oil becomes what you give to the owner of the petrol pump while filling your car tank.

Imagine how much would the actual price of petrol and diesel be? In Delhi, the petrol cost Rs 80.43  and diesel at Rs 80.78.

It is obvious that by taking so much tax, the Central Government can also earn a lot from it. Government figures show that the central government earned about Rs 2.3 lakh crores in the year 2017-18 from excise duty which has increased to Rs 2.14 lakh crores in 2018-19 and Rs 2.23 lakh crores in 2019-20.

Due to the Coronavirus pandemic, all other sources of Government’s income have been reduced. And would the government give relief to the common man by reducing excise duty? Seems unlikely.

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