In January of the current year, the price of crude oil in the international market was close to $ 83 per barrel. So far, there has been a shortage of around $ 20 per barrel. Whatever the reason. Even the government is believing that the average price of the remaining 45 days of oil reserves is $ 75. This means that it is 8 dollars below the price of January. In such a situation, the oil marketing companies of the country should have reduced the prices of petrol and diesel. It did not happen. Petroleum ministers come forward on Monday and announce an increase in excise duty by 2 rupees per liter at the price of petrol and diesel. After this, they also explain that this will not affect the pockets of common people.
Excise duty is tax imposed on petrol and diesel by the Central Government. It is from here that why the government increased excise duty? After all, how has the Modi government plan? Has the government not once again walk on the 10 -year -old path? Let us also tell you what is the government’s plan to increase excise on petrol and diesel?
Increase in excise
The government on Monday increased excise duty on petrol and diesel by Rs 2 per liter. This increase has been made at a time when crude oil prices are continuously falling in the international market. This increase indicates focusing renewed on increasing government revenue for possible capital expenditure after tax relief in Union Budget 2025. The thing to note here is that the additional cost ‘Aam Aadmi’ will not have to be borne. But from tomorrow they will have to pay 50 rupees more for LPG cylinders.
Interestingly, despite the fall in crude oil prices globally, Indians have not got relief in fuel prices. However, Petroleum Minister Hardeep Singh Puri has spoken about ‘wait and look’ regarding the cuts in the prices of petrol and diesel. He said that today I can tell you seriously. If the audience asks when the fuel prices will be low, I would say that if crude oil prices remain low, fuel prices can be expected to be cut.
Why increased?
In February, Nirmala Sitharaman cut individual income tax for the middle class, affecting the direct tax revenue estimates of the Center. The Modi government also abolished unpredictable taxes, which gave great relief to oil companies like Reliance Industries, Naira. As far as the increase in fresh excise duty is concerned, Puri said that an additional fee of Rs 2 will be added to the general fund, and it will be used to reimburse the LPG deficit of the same (oil marketing) company. If we look at history, there will be many such evidence that the Modi government did not give the benefit of low crude oil prices to the common people even in its 11 -year rule. Even when crude oil prices fell below zero for the first time in history, prices were not reduced.
Take a 10 year old story
Between November 2014 and January 2016, the government took advantage of the fall in crude oil prices and increased the excise duty on petrol and diesel nine times. During these 15 months, excise duty on petrol was increased by Rs 11.77 per liter, while diesel was increased by Rs 13.47 per liter. With this, the excise collection increased from Rs 99,000 crore in FY 2015 to Rs 2.42 lakh crore in FY 2017.
Since then, the fuel policy has been fluctuating with crude oil prices. The Center reduced excise duty by Rs 2 in October 2017 and Rs 1.50 again in 2018. But in July 2019, it again increased by Rs 2 per liter. In March 2020, the government increased the excise duty by Rs 3 per liter on both petrol and diesel and took a dramatic step by May 2020 to increase it by Rs 13 and Rs 16 per liter respectively.
However, most of them were withdrawn in the next two years as global crude oil prices reached a record high, causing petrol prices in Delhi to Rs 105.41 per liter and diesel prices to Rs 96.67 per liter. Significantly, just before the announcement of the 2024 general elections, the Center had cut fuel prices by Rs 2 per liter.