On Sunday, bound for the survey west bengal became the last to join the band, reducing VAT in Re 1 in gasoline and diesel. Rajasthan was the first to move on January 29, cutting VAT from 38% to 36%. Assam, who will also go to the polls, did the same on February 12 by withdrawing the additional 5 rupee tax imposed last year to fund the fight against the Covid-19 pandemic.
Meghalaya has given the biggest relief of Rs 7.40 on gasoline and Rs 7.10 on diesel, first with a discount of Rs 2 followed by a reduction of VAT on gasoline from 31.62% to 20% and from 22.95 % to 12% in diesel.
But so far, the Center has refused to reduce excise duties that had cumulatively increased by 13 rupees per liter on gasoline and 16 rupees on diesel between March and May 2020, when the cost of purchasing crude from India fell to 19, 9 dollars a barrel when the pandemic closed the economies. Instead, he has blamed India’s dependence on oil imports and the producers who control production for escalating fuel prices.
Oil minister Dharmond Pradhan He pointed the finger at OPEC-Plus, saying the group “backed down” on an “understanding” that production would increase from January. On Saturday, the Minister of Finance Nirmala Sitharaman He said the situation presented “dharm sankat (dilemma)” for the government.
So how much impact does crude have on pump prices? Consider: Gasoline sold for Rs 89.21 and diesel for Rs 79.70 a liter in Delhi, the benchmark market, on Sunday, when India bought crude at about $ 63 a barrel. On the same day a year ago, gasoline cost Rs 71.89 and diesel Rs 64.65 when crude averaged $ 54.63 a barrel for the month.
This means that pump prices have increased by 24%, even though the price charged to distributors has changed marginally and crude has only become 15% more expensive in one year. The fly in the ointment is a tax. The central tax on gasoline has increased 64% from Rs 19.98 to Rs 32.90 and 74% from Rs 18.83 to Rs 32.90 on diesel. Similarly, VAT on gasoline has increased from Rs 15.25 to Rs 20.61 on petrol and from Rs 9.48 to Rs 11.80 on diesel. While the excise tax remains the same, pump prices vary across states due to the difference in VAT.
The current refusal of the Center to grant tax breaks is different from October 2018, when excise duties were reduced by Rs 1.50 and state fuel retailers were asked to give a refund of another after gasoline prices they will reach 80 rupees per liter and diesel 77 rupees like that of India. the cost of crude rose to 80 dollars a barrel. Some 18 states had also lowered VAT, collectively lowering prices by about Rs 5 per liter.
.
