Despite Crude Goes Low, Petrol-Diesel Prices Hiked During Modi Government Tenure

Crude is $ 31 cheaper in 4 years of Modi government, but petrol will cost 6 rupees, GST will cost up to Rs 25

 

When the BJP took over in May 2014, Brent Crude was $ 111 a barrel, which now stands at $ 80.

 

When the BJP took over in May 2014, Brent Crude was $ 111 a barrel, which now stands at $ 80. This situation of crude is when it has been expensive in recent months, but still 28% below the $ 111 / barrel in 2014. In 2014, petrol was Rs 71, which has gone beyond Rs 77 per liter today. That is, petrol is 8% expensive compared to that time. If the government brings the petrol and diesel under the GST, following the demand of the opposition and the suggestion of the Commission, then the petrol can be cheaper by up to 25 rupees.

 

Reality: Crude was 75% cheaper in two years after 2014, when petrol fell only 17%

 

– An opportunity came after May 2014 when crude became cheaper. Crude dropped from 111 to $ 46 / barrel by 7 months in January 2015 This does not stop there in the fall. In January 2016, it slipped to $ 29. During this, crude crushed 80%, but gasoline was only 17% cheaper.

 

Reasons for expensive petrol and diesel: Excise duty, earnings of companies and 46% tax

 

1) Excise duty increased 9 times

 

– Crude being cheaper, as much as the public should have received, one quarter of it was not even found. That’s because, during November 2014 to January 2016, the government increased excise duty 9 times.

 

– Government’s earnings from excise duty was Rs 88,600 crore in 2013-14. It increased to Rs 2.42 lakh crore in 2016-17.

 

– Government earns Rs.19 per liter from petrol and diesel

 

– In the year 2016-17, the Center received a tax of Rs 2.73 lakh crore on petroleum products. This was 14% of the total income of the government (19.46 lakh crore). 85% of the total excise revenue in the center and 19% of the total tax revenue is petrol-diesel.

 

2) Earnings of oil companies increased in 4 years

 

– Indian Oil Corp’s net profit in 2017-18 stood at Rs 21,346 crore, which is the highest ever so far. During this, turnover of 5.06 lakh crore remained. IOC’s profits increased more than four times as compared to 2014-15. 40% more profits in the March quarter of 2018 The company has made profits from refinancing margins and inventory i.e. old stocks Net profits stood at Rs 5,218 crore. Profit in the same quarter last year was 3,720.62 million.

 

– HPCL’s profit fell 4% in the March quarter of 2018, but profits of 6,357 crores in the entire financial year. This is the highest ever so far. Compared to 2014-15, the company has more than doubled in 2017-18.

 

3) 77.83 liter petrol, 46% tax included

 

Oil companies bought a barrel crude oil for Rs 5903.31 i.e. Rs 37.12 per liter

 

After refining, the price of petrol sold to the dealer is Rs 38.17 per liter.

 

Excise duty: Rs 19.48

 

VAT: 16.55

 

Dealer Commission: Rs 3.63

 

Petrol price for common people: 77.83

 

(According to data of Delhi and May 25)

 

Solution: Government has 5 options

 

Short Term Solutions

 

1) Cut excise duty or states to reduce tax. The Policy Commission has also said that the state will reduce VAT by 15%. At the same time, the opposition is asking the central government to reduce excise duty.

 

2) The government will ask the oil companies to bear the losses for a few days and then compensate them later.

 

Long term solution

 

4) Now petrol is 77.82 liters, if it comes to GST, then it can be Rs. 52.48.

 

After refining, the price of petrol sold to the dealer is Rs 38.17 per liter.

 

The maximum GST of 28% also took place then 10.68

 

Dealer Commission: Rs 3.63

 

Petrol price for common people: Rs 52.48

 

I.e. less than Rs. 77.82 / liters

 

5) Windfill Tax:

 

If the government reduces excise duty to reduce the cost of petrol and diesel, then ONGC and windfill tax on other companies may be able to compensate. It will look like cess. The limit of $ 70 per barrel may be fixed. If the companies benefit from the price rise then they will have to cease the profits.

 

6) Neutral method:

 

Government can provide relief to the public by adopting Revenue Neutral Method. Diesel consumption is 3.5 times higher than petrol. In such a situation, the government can reduce the price of petrol by Rs 3.5 a liter on diesel.

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