Why Petrol And Diesel Prices Are Rising Daily And Why Govt Is Unable To Control It
Petrol and Diesel rates went up again and the central government&rsquos refusal to cut duties. The prices scaled fresh highs on Tuesday a day after Bharat Bandh was called by the opposition parties. A falling rupee and rising international oil prices have driven up domestic rates of petrol and diesel which are again heavily taxed.
As public furore mounts, Petrol and Diesel rates went up again and the central government¡¯s refusal to cut duties. The prices scaled fresh highs on Tuesday, a day after Bharat Bandh was called by the opposition parties.
Petrol price increased by 14 paise a litre to Rs 88.26 and diesel by 15 paise a litre to Rs 77.47 in Mumbai, according to a price notification issued by Indian Oil Corporation (IOC).
In the national capital, New Delhi, petrol and diesel prices rose 14 paise each to Rs 80.87/litre and Rs 72.97/litre, respectively.
Since mid-August, petrol prices are rising, continuing to burn a hole in people¡¯s pockets.
Cost & Tax composition
The Centre currently levies a total excise duty of Rs 19.48 per litre of petrol and Rs 15.33 per litre on diesel. In addition to this, the states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where 6 per cent sales tax is charged on both the fuels.
Indiatimes
Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies the highest VAT of 26 per cent on diesel. Delhi charges a VAT of 27 per cent on petrol and 17.24 per cent on diesel.
A falling rupee and rising international oil prices have driven up domestic rates of petrol and diesel, which are again heavily taxed. US sanctions on Iran may end up shrinking global oil supplies more than other producers can make up is leading to a rise in oil prices.
A cut in taxes on petrol and diesel is ruled out for now as neither the central government nor some states have the appetite to stomach revenue loss from such a move, a top government official told news agency PTI.
AFP
Taxes on petrol and diesel are a crucial revenue source for both the Centre and states and a cut will hit their fiscal position.
Crude petroleum attracts 20% oil industry development cess and a National Calamity Contingent Duty (NCCD) of Rs 50 per metric tonne. There is no Customs Duty on crude oil, but petrol and diesel attract a Customs Duty of 2.5 per cent.