The Centre on Tuesday raised the excise duty on petrol by Rs. 10 and on diesel by Rs. 13 per litre to recoup some of the loss of revenue suffered by the government due to the COVID-19 lockdown at a time when the global oil prices are extremely low..
“The change in duties will come into effect from 6 May,” an official notification said.
The price hike will be absorbed by Oil Marketing Companies leading to no increase in retail prices of fuel at the pump.
Two separate official notifications said that additional excise duty on petrol has been raised by ₹8 and special additional excise duty of Rs. 2 a litre has also been levied on it to give effect to a ₹10 a litre increase on petrol. In the case of diesel, additional excise duty has been raised by ₹8 and special additional excise duty by Rs. 5. The changes are effective from Wednesday.
“The revenue generated from these duties shall be used for infrastructure and other developmental items of expenditure,” said the official, who spoke on condition of anonymity.
In India, the base price of petrol is only about 40% of its retail price, with the remaining being various central and state government taxes, duties and cess, and transportation costs. Amid the falling crude oil prices this year, the government is trying to collect more taxes from retail fuel, which can be used to offset other revenues losses.
Oil marketing companies too have so far not passed on the benefit to the retailers and consumers, and have instead used low crude oil prices to offset their own losses. Strict lockdown across the country has restricted the movement of vehicles, causing a severe slump in fuel demand. This has also caused tremendous loss to the oil marketing companies (OMCs).To Read the full text of the Notification CLICK HERE