Excise Duty on Petrol, Diesel up by Rs 3 per litre as Oil Prices
Decline
·
Road
and Infrastructure Cess on Petrol and Diesel Raised
by Rs 1 per litre to Rs 10
The government on Saturday hiked excise duty on petrol
and diesel by a steep Rs 3 per litre
each to garner about Rs 39,000 crore additional
revenue as it repeated its 2014-15 act of not passing on gains arising from
slump in international oil prices.
Retail prices of petrol and diesel will not be impacted by the tax changes as state-owned oil
firms adjusted them against the recent fall in oil prices and the likely trend
in the near future, industry officials said.
According to a notification issued by the Central
Board of Indirect Taxes and Customs, special excise duty on
petrol was hiked by Rs 2 to Rs 8 per litre in case of petrol and to Rs
4 a litre from Rs 2 in case
of diesel.
Additionally, road cess
was raised by Re 1 per litre each on petrol and
diesel to Rs 10.
With this, the total incidence of excise duty on
petrol has risen to Rs 22.98 per litre
and that on diesel to Rs 18.83.
The tax on petrol was Rs
9.48 per litre when the Modi government took office
in 2014 and that on diesel was Rs 3.56 a litre.
Officials said the increase in excise duty will
result in annual increase of government revenues by about Rs
39,000 crore. The gains during the remaining three weeks of the current fiscal
would be less than Rs 2,000 crore.
Petrol and diesel prices, which are changed on a
daily basis, were cut by 13 paise and 16 paise respectively as oil companies adjusted the excise
duty hike against the drop in prices that warrants from international rates
slumping the most since the Gulf war.
Petrol now cost Rs 69.87
a litre in Delhi and a litre
of diesel comes for Rs 62.58.
The government had between November 2014 and
January 2016 raised excise duty on petrol and diesel on nine occasions to take
away gains arising from plummeting global oil prices.
In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on
diesel by 13.47 a litre in those 15 months that
helped government's excise mop up more than double to Rs
2,42,000 crore in 2016-17 from Rs 99,000 crore in
2014-15.
It cut excise duty by Rs
2 in October 2017 and by Rs 1.50 a year later. But it
raised excise duty by Rs 2 per litre
in July 2019.
Government sources said that while the benefit of
reduction of crude prices in the first quarter of this year has significantly
gone to the consumer, the Centre has taken this step of increasing duty to
raise some revenue in view of a tight fiscal situation. This would help in
generating the resources for development of infrastructure and other
developmental items of expenditure, they said.
Benchmark crude oil prices have halved since
January to USD 32 per barrel. In sync with this, the prices of petrol and
diesel have also come down by more than Rs 6 per litre (from Rs 76.01 a litre on January 11, 2020 to Rs
69.87 a litre on March 14 for petrol, and from Rs 69.17 to Rs 62.58 for diesel
during the same period in Delhi).