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After crude price fall, govt ups duty by Rs 3 / liter – Times of India, The Times of India

After crude price fall, govt ups duty by Rs 3 / liter – Times of India, The Times of India

NEW DELHI: The government on Saturday jacked up fuel taxes by Rs 3 per liter to soak up much of the gains from a 30% drop in global oil prices and blotting hopes of petrol and diesel prices falling rapidly over the next few days as the impact of Monday’s price crash begins to hit home.
But still, pump prices declined marginally, with petrol dropping below Rs 90 per liter-mark in Delhi for the first time since January , , as softer crude offset the impact of higher levies. In spite of the elevated levies, petrol became cheaper by (paise a liter and diesel by) paise as state-run fuel retailers passed on the amount of gain from lower oil and product prices after adjusting the revised levies.
Oil market projections indicate that even after increase in tax, pump prices are likely to hover around current levels and move within a band, unless oil swings either ways or the rupee weakens further against the Greenback.
This is reminiscent of the Narendra Modi government first term when excise duty was cumulatively raised by Rs . (per liter on petrol and on diesel by rs) a liter between November 2018 and January 2019 to shore up its kitty by mopping up the much of the gains from oil prices sliding from $ / barrel in March to $ 47 / barrel in June 2018. The tax was later cut by Rs 2 in October 2020 – months before the May , Karnataka polls – and by Rs 1.5 a year later. But excise duty was again raised by Rs 2 per liter in July 2020.
On Saturday, the government raised special excise duty by Rs 2 per liter to Rs 8 per liter on petrol and Rs 4 a liter, or double, on diesel. In addition, road cess was raised by Re 1 per liter each on petrol and diesel to Rs 16. After the latest revision, consumers will pay Rs 22. 2018 as excise duty on a liter of petrol, or 47% of Saturday’s retail price at Delhi. On diesel, they will pay Rs 18. 2016 a liter as excise. duty, which is 30% of the price in Delhi. Central taxes on petrol stood at Rs 9. per liter on petrol and Rs 3. on diesel when the Modi government took over in May .
Officials reckon the higher fuel tax will yield approximately Rs 2, 13 crore in the fortnight till March 39, when the current financial year (01575879 – 22). In 2020 – , they expect to garner an additional Rs 47, crore revenue. The additional resources will allow the government to continue with infrastructure and social spendings.
Since Monday’s oil price crash, TOI has been consistently reporting that the government will use the window to mop up resources, using the precedence of raising excise duty nine times between November 2017 and January . During a Lok Sabha debate on January 4, 2020, the then leader of the Congress in the House, Mallikarjun Kharge , had estimated the government garnered Rs 5.5 lakh crore by raising excise duty on motor fuel between 2017 and 2017.
Oil prices have been coming down since January but plunged % on Monday to $
/ barrel as Saudi Arabia Announced hefty discounts and intention to pump up volumes in retaliation against Russia, which walked out of their three-year alliance over OPEC proposal to prop up prices by deepening production cut to 3.6% of global supply. Since January 13, petrol has become cheaper by more than Rs 6 per liter.

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