The total central excise duty, including cesses, collected from petrol and diesel from FY 2014-15 to 2020-21 is about Rs.14.4 lakh crores.
In India, fuels like petrol and diesel are sold for Rs.100 and Rs.95 respectively which includes the major part as central and state government taxes. It is a common complaint that the central government is not reducing the tax even when some of the state governments reduce their share of tax.
The central government has fixed the excise duty for petrol as Rs.32.90 and diesel as Rs.31.80. Whenever questions raise on deducting excise duty, Finance Minister Nirmala Seetaraman answers, “price of petrol and diesel will get reduced if oil company thinks of reducing it”, in February 2021.
In August 2021, “When the crude oil price was increased internationally in 2007-08, the government under Manmohan Singh provided a subsidy to control the hike in price. For this, the Congress government has approved oil bonds for 1.3 lakh crores to oil companies. It has been evaluated that it will take time till 2026 to settle the amount with interest. The government has paid 70195 crores in the last five years. The fuel price could not be reduced since there is a balance of Rs.37000 crore to be paid as interest before 2026”, she said.
However, the central excise duty collected for petrol and diesel during the BJP regime for a period of one year is not even half the amount for which oil bonds were bought during the Congress rule.
Recently, when the Rajya Sabha MP Digvijaya Singh raised a question on the revenue generated from petrol and diesel, Pankaj Chaudhary, The Ministry of State in the Ministry of Finance answered, “The total central excise duty, including cesses, collected from petrol and diesel from FY 2014-15 to 2020-21 is about Rs.14.4 lakh crores”.
Livemint reported, “In March, it is informed that central government’s tax collection on petrol and diesel has increased over 300 per cent in the last 6 years. During the first year of Modi’s rule in 2014-15, excise duty collected from petrol is 29279 crores and collected from diesel is 42881 crores.
The excise duty has increased to 2.94 lakh crores in the first 10 months of the current financial year 2020-21, answered a Minister for the question raised in Lok Sabha”.
It is rumoured that the oil bonds bought during Congress rule is the reason behind the hiked price of fuels in 2018 and that the Modi government has settled loans of 2 lakh crores. A detailed article on the oil bonds bought during the Congress regime can be read by visiting the above link.
The BJP government majorly depends on the revenue from petrol and diesel. Revenue generated through the central excise duty is spent on the Country’s infrastructure and for the actions taken during Covid. The excise duty is not reduced since it would create an imbalance in managing the finances. However, they seem to give new reasons each time for not cutting the excise duty.