New Delhi: At a time when global oil prices are plunging, the economy is on a downslide and the coronavirus outbreak is likely to dent the economy badly, the Narendra Modi government has dealt another severe blow to consumers. On Saturday, the government hiked excise duty on petrol and diesel by a steep Rs 3/litre.
The decision evoked a lot of criticism from people on social media, who termed this a ‘pickpocketing’ ordinary people while filling up the coffers of a failed bank with taxpayer money.
The Modi government claims that it would garner Rs 39,000 crore additional revenue, once again depriving the citizens of the slump in international oil prices, just as it did it 2014-15.
However, the government officials claimed that retail prices of petrol and diesel would not be impacted by the excise tax changes as state-owned oil firms had already adjusted these against the recent fall in oil prices, as pera PTI report.
According to a notification issued by the Central Board of Indirect Taxes and Customs, special excise duty on petrol was hiked by Rs 2 to Rs 8 per litre in case of petrol and to Rs 4 a litre from Rs 2 in case of diesel.
Additionally, road cess was raised by Re 1 per litre each on petrol and diesel to Rs 10.
With this, the total incidence of excise duty on petrol has risen to Rs 22.98 per litre and that on diesel to Rs 18.83.
The tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.
According to a tweet by James Wilson, a number cruncher on social media, there has been a hike of 142% in diesel prices and 429% in petrol prices since the Modi government took over from the United Progressive Alliance-2 in 2014.
“Let's see what was the excise on Petrol & Diesel when Modi taken over from UPA-2. The last hike before May 2014 was in 14/09/2012. Petrol then Rs.9.48, now it is Rs 22.98/-, a hike of 142%, diesel then Rs.3.56, now it is Rs.18.83, a hike of 429%.”
Petrol and diesel prices, which are changed on a daily basis, were cut by a measly 13 paise and 16 paise, respectively, as oil companies adjusted the excise duty hike against the drop in prices that warrants from international rates slumping the most since the Gulf war.
Petrol now cost Rs 69.87 a litre in Delhi and a litre of diesel comes for Rs 62.58.
The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.
In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government's excise mop up more than double to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.
It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019.
Government sources told PTI that while the benefit of reduction of crude prices in the first quarter of this year had significantly gone to the consumer, the Centre had taken this step of increasing duty to raise some revenue in view of a tight fiscal situation.
A few days ago, global oil prices plunged to a four-year low by 24% after an deal failure by OPEC sparked a price war between Saudi Arabia and Russia.
Taking a dig at the Modi government for not passing on the benefits to consumers, Congress leader Rahul Gandhi had criticised it for ignoring the economy while focusing more on ‘destabilising and elected government’, alluding to the Madhya Pradesh government.
Nationalist Congress Party leader Supriya Sule also flayed the Modi government for its “complete failure and mismanagement of the economy.
CPI(M) general secretary Sitaram Yechury also slammed the Modi government for helping out corporates while adding to the burden of the common citizen. “At a time of great economic despair for common Indians for months now, joblessness, difficulties arising out of the pandemic and social strife, this govt’s rich cronies get loan waivers, the rest of India gets excise hikes,” Yechury tweeted.
(with inputs from PTI)