India’s oil market was closed when crude oil prices fell negatively in the international oil market. As the oil market collapsed due to the downturn, the Indian government launched a crackdown on the Indian public. At a time when international oil prices were at an all-time low, the Indian government abruptly increased excise taxes on diesel and petrol by Rs 13 and Rs 10, respectively. After the central government, the state governments also started raising VAT on petrol and diesel. The price of crude oil in the international market has fallen to a negative level, but the benefit has not been transferred to ordinary consumers.
As crude oil prices fall in the international market, the government is raising excise taxes to keep market prices stable. However, if prices rise in the international market, its impact is immediately felt. When the price of crude oil was low, the tax money from the consumers went to the government through dealers. Today, when the price of crude oil rises slightly, it goes straight out of our pockets. Petrol and diesel prices have been rising every day for the past 15 days. In two weeks, the price of diesel has gone up by Rs 7.82 per liter and petrol by Rs 8.28 per liter. In two weeks, petrol and diesel prices in Odisha were below Rs 60 a liter. Petrol prices in Bhubaneswar have gone up by Rs 7.62 per liter after a 17-day hike in oil prices yesterday.
Demand for petrol and diesel fell sharply in March and April. However, in the last 15 days, the post lock down demand for fuel has increased by 80-85%. With rising demand, the Indian government sees the oil market as the only way to increase revenue. Criticizing the Congress for opposing the hike in petrol prices, BJP president JP Nadda said it was necessary for petrol and diesel prices to rise for the development of the country. This is the easiest argument for a ruling dispensation. They do easily forget that how often they hit the streets with slightest hike in fuel price during UPA era. But now they have altogether a different logic to prove how patriotic it is to hike the fuel prices. It is noteworthy that the Government of India levies the highest oil taxes in the world. The government is levying a maximum of 69% tax on diesel and petrol prices. This is a record. Based on the petrol and diesel prices available in Delhi, we can say that we are paying the government Rs 56.72 per liter of petrol. Similarly, the government is levying a tax o Rs 58.8 per liter on diesel. It is higher than any other country in the world. According to “Business Today”, Italy levies 6%, Germany and France 73%, England 73%, Spain 53%, Japan 8%, Canada 33% and the United States 18%. The Indian government has made every effort to use petrol and diesel as a fertile ground for over taxation.
