Economy in reverse

By Nagaland Post | Publish Date: 3/30/2021 1:22:54 PM IST

 Though global crude prices are sliding, yet this has not been reflected in the sale prices of petrol and diesel in India. The reason is that the base price of petrol and diesel have been reduced in line with global price of crude oil but the taxes have increased. According to a report quoting official sources in the ministry of petroleum, the domestic price of petrol and diesel are linked to international crude price. However, nothing is more untrue and misleading since the retail prices of petrol and diesel have risen sharply since 2018. On March 25,2021 the government had marginally decreased taxes rather symbolically when excise fell by 21 paisa per litre for petrol and 20 paisa per litre on diesel. The average current selling price of petrol and diesel across India hover around Rs.84 per litre of diesel and Rs.93 for a litre of petrol. In 2014, petrol was sold for Rs 71.51 a litre and Diesel for Rs 57.28 a litre. In 2021, a litre of petrol is Rs.89.59 while a litre of diesel is Rs.83.10. Comparatively, a litre of petrol since 2014 has increased by Rs.18.08 and a litre of diesel since 2014 has increased by Rs.25.82. It is important to note that high petrol and diesel prices was one of the biggest issues the BJP had raised when it came into power in 2014 when it promised to bring it down. Presently, the global price of OPEC basket is around $50 . The average world crude oil price through the last week hovered around $50.05 per barrel. The crude oil price did appreciate by around five percent last week in anticipation that the newly discovered Covid vaccines may improve the global economic situation and raise the oil demand. Contrast the current global crude oil prices with those prevailing in the middle of 2008 during the UPA-II rule when the highest recorded price reached $147.02 per barrel. Today it’s around $ 50 a barrel, but users have not benefited. In 2014, the excise duty per litre on diesel was Rs 3.56 and Rs 9.40 on petrol. By March 2021 excise duty per litre on petrol is Rs.32.9 per litre and diesel is Rs.31.8. Notwithstanding the consistent fall of crude oil prices, both petrol and diesel have only become dearer for consumers in India, with the government trying to cash in on lower prices by hiking the excise duty of the fuels. Crude oil prices crashed in 2020 during the severest phase of the Covid-19 pandemic the retail prices of petrol and diesel did not come down in India. Domestic petrol and diesel prices don’t dip sharply when global crude oil prices nosedive. They didn’t drop when the global crude price temporarily crashed to $19 a barrel last year. The average closing price of crude oil was only $39.68 per barrel through 2020. Why were Indian consumers still made to pay an average of Rs.84 for a litre of petrol and Rs.93 for a litre of diesel? This is because they provide the easiest revenue source for the Central government. Revenue from liquor and petroleum was the principal income source for the government. To ensure its income flow remained intact, the government raised taxes on petrol and diesel in a way that the prices remained static while the government earned more money.

Launched on December 3,1990. Nagaland Post is the first and highest circulated newspaper of Nagaland state. Nagaland Post is also the first newspaper in Nagaland to be published in multi-colour.

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