Published: Thu, September 14, 2017
Money | By Oscar Reynolds

Centre makes Rs 1.6 trillion more on fuel

Centre makes Rs 1.6 trillion more on fuel

The statement comes amid reports that government has no plans to lower the excise duty on fuel, and so consumers will end up paying higher taxes for petrol and diesel.

Pradhan explained the reason behind surge in petrol prices and said that it is linked to global prices and not directly to the cost of production.

When calculated on the basis of Nielsen consumption data, trucker users had borne largest tax burden by paying approximately Rs 34,735 crore in additional levy in FY16-17, followed by two-wheeler users who paid Rs 23,210 crore of additional tax, private diesel cars Rs 16,168 crore, private petrol cars 12,973 crore among others. He said, the daily revision immediately passes on the benefit of any reduction in global oil prices to consumers and avoids sharp spikes by spreading them in small doses.

Petrol and diesel prices have risen to their highest in three years in some cities in the country, following a sharp rise in global rates driven by the hurricane-induced shutdown of refining capacity in the US.

Oil Minister Dharmendra Pradhan on Wednesday ruled out any government intervention to disrupt the daily revision in petrol and diesel prices despite the ₹7.3 per litre spike since July, saying the reform will continue.

"The government has no business to interfere in pricing by oil companies.petrol, diesel prices are deregulated and market aligned", he added.

Mr. Pradhan said the global prices had risen due to factors such as the hurricanes in the US, and there were already indications of a "softening in the rates".

Defending hike in fuel prices, Mr Pradhan said that world refining capacity has come down by 13 per cent due to hurricane in U.S. due to which in last three months worldwide petrol prices have jumped by 18 per cent and diesel by 20 per cent.

He, however, remained non-committal on cutting taxes to soften the blow of the relentless rise in prices since the government need to finance huge infrastructure and social projects has to be balanced with consumer needs.

There seems to be no respite for consumers from sky rocketing petrol and diesel prices.

Daily revision allows any fall in worldwide oil rates to be passed on to consumers immediately rather than having to wait for 15 days as in the old system, he added.

A working Saurav Banerjee from Kolkata said, "In the last six months it was still manageable.But now daily, there has been a price hike and there is no reduction".

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