Centre admits to earning Rs 33 on every litre of petrol, Rs 32 on diesel

Central government has confessed to earning Rs 32.98 on every litre of petrol and Rs 31.83 per litre of diesel in the form of excise duty. In response to a question, Minister of State for Finance Anurag Thakur told the Lok Sabha that the excise duty rates have been calibrated to generate resources for development projects.

Responding to a question on tax levied on petrol and diesel from consumers, Thakur also divulged that consumer price inflation has halved in January 2021 as compared to the year-ago period, the same in petrol and diesel has grown substantially during the same period.

Thakur told the Lower House that central excise duty, which includes basic excise duty, cess and surcharge, on unbranded and branded petrol stood at Rs 19.98 per litre and Rs 21.16 per litre, respectively, on January 1, 2020. As on December 31, 2020, the same for unbranded petrol went up to Rs 32.98 per litre and that for branded version of the fuel grew to Rs 34.16 per litre.

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In the case of unbranded diesel, central excise duty increased from Rs 15.83 per litre to Rs 31.83 per litre over the course of last year. For branded petrol, the excise duty went from Rs 18.19 per litre to Rs 34.19 per litre during this time.

As for whether petrol and diesel prices in India were higher than those in international markets, Thakur said that the government doesn't maintain a record of factors that determine these prices abroad.

"The prices of petroleum products in the country are benchmarked to international product prices. Generally, the price of petroleum products in the country are higher/lower than other countries due to a variety of factors, including prevailing tax regime and subsidy compensations by the respective governments, the details of which are not maintained by the government," he said.

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Talking about the reasons for hiking taxes on transportation fuels, the junior Finance Minister stated: "The excise duty rates have been calibrated to generate resources for infrastructure and other developmental items of expenditure keeping in view the present fiscal position."

Giving details about the effect on hike in petrol and diesel prices on inflation levels in 2020, Thakur disclosed that Consumer Price Index-Combined (CPI-C) inflation declined from 7.59 per cent in January 2020 to 4.06 per cent in January 2021. However, inflation transportation fuels increased during this period.

"CPI--'Petrol for vehicle' inflation has increased from 7.38 per cent in January 2020 to 12.53 per cent in January 2021. CPI--'Diesel for vehicle' inflation has increased from 6.44 per cent in January 2020 to 12.79 per cent in January 2021," he further added.

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