Page 35 - 31OCT2018E

FUEL PRICES

o sooth public anger and as that was delivered to the dealers in the pricing approach to set pump prices
a big political move ahead city at a cost of 39.21. of petrol and diesel on a daily basis,
of 2019, the Centre has On petrol, the Central Excise Duty the move was expected to ensuring a
cut the fuel prices by 1.50 that has been levied amounts to 17.98 market-driven approach to fuel pricing
T per litre while promising per cent and State VAT of 17.86 per by factoring in day-to-day fluctuations
that the Central government would cent. Little doubt that there has been a in crude oil prices as well as move -
work towards effective relief of 5 per clamour for bringing petrol and diesel ments in the exchange rate of the U.S.
litre. Finance Minister Arun Jaitley under the GST. dollar to the rupee. However, instead of
announced that in addition to excise giving respite to people, it has led to a
duty being cut by 1.5 per litre, oil mar- Highest in South Asia regular upward trajectory of petrol and
keting companies would also take a hit India has the highest fuel prices in diesel prices.
of 1 per litre as well. “We will also write South Asia. For instance petrol sells at Rising fuel prices have become a
to states, asking them to reduce VAT value of 63 a litre while in Pakistan it political controversy in India, with
taxes by another 2.5 per litre. Conse- is at 54.51. Even in Bangladesh, it costs attention specifically focused on the
quently, we are hoping for a v5 per litre 75 a litre. high taxes that the Centre charges.
reduction,” he added. The politics over fuel pricing has Naturally when Centre announced a
Increasing prices add

more fuel to politics

Haircuts in the Centre’s excise duty on petrol and diesel and urging States to order a 2016. This rapid tax escalation more far European companies could with- • Oil turmoil End consumers say that the relief
matching cut has only heated up the politics over fuel pricing, writes SUMAN than doubled its excise collections from stand American pressure and continue in oil prices is too late and too little
petro goods in the last four years – from trade with Iran. Oil prices are also driv-
99,184 crore in 2014-15 to 2,29,019 en up by coordinated action by Russia political message ahead of election in
crore in 2017-18. States saw their VAT and Saudi Arabia to keep supply on a some States.
In India, almost half of the price now touched its crescendo. While post fuel price cut, the share prices of oil revenue from petro goods rise from tight leash. But in coming days, voices are go-
of retail fuel is due to taxes and as 2014, the oil companies, the Centre and marketing companies like Hindustan 1,37,157 crore in 2014-15 to 1,84,091 Now after months of fuel shock, ing to become shriller to bring pet -
such when the petrol was being sold States reaped benefits as international Petroleum Corporation Ltd plunged crore in 2017-18. there is some relief but no need to play rol and diesel prices under GST to
in Mumbai at about 90 a litre, the crude prices were falling, it has now immediately, down by as much as 12 per Given the extent to which Central politics over it. The Centre has given a bring parity in prices. Time when
basic price was only 42. For instance in played a political card when public cent in initial trading. and State taxes inflate the final fuel Centre and States were milking the
Madhya Pradesh, the VAT on petrol, as anger was rising high over daily dose The move likely to see a negative prices paid by consumers, the govern- international price dip is history now.
on October 1, 2018, was 35.93 per cent of heavy prices. The trigger has been revenue impact of 10,500 crore as a ments have the option of trimming Given the extent to Whether the UPA was giving sub-
and on diesel 23.22 per cent. Similarly in asking States to bear a cut of 2.50 per result of the tax cuts. There is no doubt excise duty and VAT. Why prices sidy to public sector oil companies to
Delhi, when the petrol price was about litre as announced by the Centre. the policy of high oil taxes has become shot up is because the Brent, the which Central and stabilize oil prices or the whether the
89.41, the taxes were up to 43.97 a litre. While BJP run states have fallen a source of political debate over the last international benchmark for oil prices, State taxes inflate Centre made 18,000 crore by way of
Besides the cost of crude oil and the in line, non BJP ruled states have not month, with surging global oil prices sometime back crossed $80 a bar - higher taxes when crude prices were
exchange rate, the incidence of Excise yielded giving BJP a handle to beat no longer providing the Centre with a rel. The current price is almost three the final fuel prices going down, is debatable.
Duty by the Centre and VAT by the opposition in foremanship. The oppo- cushion to defend itself with. times the cost in early 2016 when it End consumers are happy with re-
States along with dealer commission sition ruled states claim that since Au- was $29 a barrel. paid by consumers, lief saying that this is too late and too lit-
that the oil companies pay to fuel pump gust 2018, the states of Karnataka, Ra- Doubling revenues The full impact of re-imposition of the governments tle and “ye dil maange more” as burning
owners, ends up approximately dou- jasthan, Andhra Pradesh, West Bengal After global oil prices fell in 2014, the sanctions on Iran has also started af- hole in the wallet is rather big. It is time
bling the final price consumers pay. The and Kerala cut fuel prices by anywhere government raised the excise duty on fecting. European countries, Russia and have the option of now to end politics over oil prices by
information posted on IOC’s website between 1 to 2. petrol by 11.77 a litre and on diesel by China, who are part of the Iran deal, trimming excise BJP, Congress, AAP or all other parties.
shows that on September 3, a consumer When state-run oil marketing 13.47 a litre in nine installments be - have said they will not participate in
in Delhi paid 79.15 for a litre of petrol companies switched to a dynamic tween November 2014 and January American sanctions. It is unclear how duty and VAT LETTERS@TEHELKA.COM

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