Despite international crude oil prices going below $45 a barrel, India is not relenting its grip over it as the source of its taxation by offsetting the price cut with immediate and almost simultaneous hike in the excise duty by Rs.2 per litre, virtually making no difference in the sale price of fuel.
On their part, state-run oil marketing companies on Friday cut petrol price by Rs.2.42 a litre and that of diesel by Rs.2.25 per litre, as per the international price cut of the crude oil. With the concurrent rise in excise duty by the government at Rs.2, the actual relief to the consumers is merely 42 paise on petrol and 25 paise on diesel.
“Indian Oil Corp has decided to effect the following price changes w.e.f midnight of 16th/ 17th Jan 2015: Decrease in retail selling price of petrol by Rs.2.42 /litre at Delhi (including state levies) with corresponding decrease in other states. Decrease in Retail Selling Price of Diesel (Retail) by Rs. 2.25 /litre at Delhi (including state levies) with corresponding decrease in other states,” the oil marketer said in a statement.
The basic excise duty on the transport fuels, raised for the fourth time in quick succession, would be effective from midnight of Jan 16 and there would be no change in other excise duty rates applicable to the transport fuels, the government said.
The move on excise duty hike was taken though on Jan 1, the government move is coming in the wake of the fall in taxes due to the sustained decline in international crude oil prices.
The fact that the government is losing money in the form of taxes, which are more than the international average, is evident from the hiked excise duty by Rs.1.50 a litre on both the fuels first on Nov 12, again on Dec 2, the duty on petrol was hiked by Rs.2.25 per litre and on diesel by Re.1 a litre.
For the third time in row, the government has increased the duty by Rs.2, virtually not passing on the benefit of price decline to the end consumer.