Consumer pays 275% in taxes on petrol to Centre, states

With the steep hike in excise duty in the past two months, an average consumer of petrol now pays over 275% in taxes to centre and states on a litre of the fuel. It was 107% in February. The base price of petrol is just about Rs 18. The taxes are close to Rs 50 and the pump price is over Rs 72.

On diesel, the cumulative taxes by Centre and states, makes a consumer pay over 255%. The base price of diesel is about Rs 18.50 a litre. The pump price is over Rs 70 a litre.

Read: Petrol, diesel prices hiked by 60 paise per litre for second straight day

On petrol, the exice duty levied is at close to Rs 33 a litre, while on diesel it is around Rs 32 per litre. The VAT is levied at over Rs 16 on petrol and diesel. Together, both taxes are over Rs 49 while the pump price of petrol is an average Rs 72 a litre. The two taxes are about 69% of the pump price of petrol and diesel. This is the highest in the world.

While the USA charges 19% in tax, Japan charges 47%, UK 62% and France 63%.

According to brokerage Care Rating, the government has never passed on the full benefts of crude oil prices to consumers in India. When the prices of global crude oil crashed below $20 on April 12, India paid close over Rs 70 for a litre of petrol.

Also Read: Petrol, diesel prices increased by 60 paise a litre

Taking advantage of the lower global crude prices, the government hiked excise duty on both fuels twice by upto Rs 13 per litre. For about two weeks after increasing excise, the oil marketing companies did not charge the consumers.

In the last two days – Sunday and Monday – they hiked prices on both transport fuels by Rs 1.20 per litre each. The move has prompted the Opposition Congress to lodge a protest with its senior leader P Chidambaram saying fuel price hike is benefiting the government and oil companies while consumers are paying heavily.

Read: Govt is poor, needs more taxes: P Chidambaram on fuel price hike

“Fuel selling prices raised twice in two days, following tax hikes two weeks ago. This time to benefit oil companies. Government is poor, it needs more taxes. Oil companies are poor, they need better prices. Only the poor and middle class are not poor, so they will pay,” Chidambaram said in series of tweets.