Consumers feeling the pinch of rising fuel bill are unlikely to get any respite soon as the Cetre has ruled out any further cut in excise duty on petrol and diesel to cushion the impact of surging crude oil prices.
Since October 4 last year, rates have shot up by close to Rs 5 a litre and diesel by nearly Rs 7.50 per litre to Rs 73.38 and Rs 64.22 a litre, respectively, as on February 7. Retail prices have moved up consistently since October 4, when the government reduced excise duty on them by Rs 2 per litre after a gap of almost two years.
Global crude price remains above $70 a barrel. With expectation of a further pick-up, retail prices of auto fuel are set to shoot up.
“The budget 2018-19 is a sham and has played the biggest joke on consumers. While government reduced basic excise duty on petrol and diesel that should have provided relief to them from higher auto fuel prices, it brought in a new levy in the form of road and infrastructure cess by an amount equal to the taxes reduced and withdrawn,” said an oil industry expert, asking not to be named.
The Centre has made a killing from additional levy of excise duty on two petroleum products that were raised on nine occasions between November 2014 and January 2016.
This duty on diesel was raised by a whopping 380 per cent from Rs 3.56 per litre in April 2014, to Rs 17.33 per litre, all in 3 years. In case of petrol , excise went up from Rs 9.48 per litre to 21.48 per litre, a 127 per cent increase.
This has raised excise duty on petroleum products from Rs 99,000 crore in 2013-14 to an expected Rs 3,00,000 crore in 2017-18. Ever since the Modi government has come to power, it is estimated that Rs 6,25,000 crore of excise/VAT has been levied but benefit of lower duty has been provided only once when excise was reduced on October 4.
“Such a mammoth income could have been used genuinely to change people's lives, but none knows what happened to such a windfall,” said the expert quoted earlier.