Excise collection on diesel up by 262% in 4 years

The Centre’s revenues through excise levy on diesel have increased by over 262% and on petrol by 158% in the past four years since 2014, government data showed, even as consumers continued to pay at elevated rates.

The Centre earned over Rs 1.50 lakh crore in excise duty on diesel in 2017-18, up from Rs 41,462 crore in 2014-15.

On petrol, the excise duty collection was Rs 73,516 crore in 2017-18, which was about 157% higher than Rs 28,526 crore in 2013-14, the numbers produced by the government in Parliament said. Excise levy on the two fuels gave the Centre a massive Rs 2.24 lakh crore in 2017-18.

A whopping rise in excise collection year-on-year has led to high prices of petrol and diesel. Petrol prices even today remained at the same level as that of 2014 although Brent crude prices have crashed. They have come down as low as $53 per barrel as against $112 per barrel in 2014.

Petrol prices hovered around Rs 70 per litre for a better part of 2014. They are around Rs 70 even today. Given that fuel prices are largely determined by the behaviour of international crude prices, they should have dropped by half now.

Almost half of India’s fuel price is made up of taxes. The Centre levies Rs 19.48 excise duty on a litre of petrol and Rs 15.88 on diesel. India’s retail petrol price is higher than that of neighbouring Pakistan and Sri Lanka.

Global crude prices are on a decline and have fallen by over 30% in 2018 on the back of unusually high production in the US and demand cut fear amid a global economic slowdown. India’s excise on the two fuels, however, remains the same.

Diesel prices have increased from around Rs 50 per litre in 2014 to over Rs 63 a litre now. In fact, the difference between diesel and petrol has narrowed at a quicker rate in 2018.

According to the data, In January, diesel in Delhi sold at Rs 59.70 per litre and petrol at Rs 69.97 per litre.

On December 24, diesel at Delhi pumps was priced at Rs 63.83 per litre and petrol at Rs 69.89 a litre.