Modi’s Oil Tax Bonanza Surged 460% In Seven Years: In Charts
When Prime Minister Narendra Modi was first elected, global crude prices had collapsed from multi-year highs. But that benefit wasn't passed on to consumers. His government consistently increased taxes on fuel to shore up revenue as the economy slowed. That oil tax bonanza has grown fivefold.
Excise collection on just petrol and diesel stood at Rs 2.94 lakh crore in the first 10 months of the fiscal ending March, according to a written reply by Oil Minister Dharmendra Pradhan in the Lok Sabha. That compares with Rs 52,537 crore in 2013-14, the last full fiscal of the Manmohan Singh government.
Retail prices are at a record high as crude has been rising in anticipation of an increase in demand as the global economy recovers from the shot of the pandemic. Yet, Brent crude at close to $70 is still lower than the average of more than $110 a barrel between FY11 and FY14.
What consumers pay at the pump has risen as the government increased taxes. That includes a record increase this fiscal as the lockdown stalled the economy in the first half. Taxes, central and state, now account for close to half of the retail price.
The collections from central levy on petrol and diesel in April-January has surged by a record 65% over the entire FY20, according to the minister’s response. On all petroleum fuels, it jumped 52.8%.
That means, overall excise duty collection on all fuels put together has risen to more than Rs 3 lakh crore in April-January this fiscal. That compares with Rs 2.37 lakh crore in FY16. The response in Lok Sabha didn't reveal prior data.
Share Of Taxes Doubles
The combined share of the central and state taxes in the retail price doubled:
Petrol: 31.2% in May 2014 to 59.16% in March 2021.
Diesel: 19.4% to 53.7% during the period.
The government consistently increased excise duty, with the biggest jump in FY21. The levy rose by Rs 13 and Rs 16 a litre, respectively, on petrol and diesel.
How Prices Rose
Price of the non-subsidised LPG cylinder refill doubled during the period, rising the most among fuels.
Since June 2020, LPG prices were increased eight times, with steepest hikes in the last few months starting from December.