Protest actions were organized at the call of CPI (M) across the country against the hefty hike in the retail price of the petrol and diesel. The last four years of the Modi regime has seen regular hike in the price of petroleum products. Ironically the BJP leaders including the current PM Modi were the ones who were tweeting against the similar hikes during the UPA regime and now BJP is working to push the Congress’ agenda with even more aggression.
The sharp increase in the retail price of petrol and diesel is having a backbreaking impact on the ordinary people of this country. The price of the petroleum products have the obvious cascading effect on the essential commodity prices which the common man uses for daily life. The unusual rise which makes retail prices of petroleum products in India, the highest in South Asia is principally on account of the tremendous hike in mopping up revenues by the central government, through excise duties.
(The comparison based on the prices in August, 2017)
In the last four years, from 1st April 2014, the excise duty on petrol has gone up from Rs. 9.48/litre to Rs. 19.48/litre as of now. This amounts to a hike of 105% and 47.4% of the retail price is going to the tax revenue collection. Similarly, the excise duty on diesel which was Rs. 3.56/litre on 1st April 2014 has now gone up to Rs. 15.33/litre. This again amounts to an increase of 330%, while 38.09% of the retail price is going to taxes. Going back to the earlier promise of reducing the duty in the event of hardening of the international crude price, the government will commensurately reduce the duty, the high level of duties continue resulting in backbreaking burden on the people. The retail prices of petrol and diesel are both now ruling at the highest ever levels.
The price of the crude oil in the international market has fallen in the last 4 years. Let us illustrate this. At Rs 59 to a dollar, one barrel of the Indian basket of crude oil would have cost around Rs 6,304 in May 2014. At Rs 65 to a dollar, one barrel of oil would have cost around Rs 4,147 per barrel in March 2018. Even after adjusting for the depreciation of the rupee against the dollar, oil was around 34.2 percent cheaper in March 2018 in comparison to May 2014.
The retail price of petrol and diesel constitutes taxes collected by the central government, the respective state government where they are being sold, as well as the dealer commission. Let’s consider the situation in Delhi in May 2014. The retail selling price of one litre of petrol as mentioned above was Rs 71.41 per litre. The price before dealer commission and taxes was Rs 47.12.
This meant that Rs 24.29 per litre was collected as dealer commission and taxes. Of this, Rs 2 made for the dealer commission. Rs 10.39 was the tax collected by the central government. Rs 11.9 was the tax collected by the state government. The dealer commission and taxes constituted 34 percent of the retail selling price of petrol.
Now let’s cut to March 2018. The retail selling price of petrol as on 19 March 2018, in Delhi, was Rs 72.19 per litre (this is the latest data available). The price before dealer commission and taxes worked out to Rs 33.78 per litre. This basically means that Rs 38.41 per litre was collected as dealer commission and taxes.
Of this, Rs 3.58 was the dealer commission. Rs 19.48 was the tax collected by the central government and Rs 15.35 was the tax collected by the state government. The dealer commission and taxes constituted for around 53 percent of the retail selling price of petrol.
Basically, between May 2014 and now, the dealer commission and taxes in total have gone up by 58.1 percent (in Delhi). A similar dynamic has played out in other parts of the country as well. The same logic holds for diesel as well. In fact, dealer commission and taxes made up for 21.5 percent of the diesel price in Delhi in May 2014. As on 19 March 2018, it made up for 43.2 percent of the retail selling price. While the average price of the Indian basket of crude oil was US $106.85 per barrel in May 2014, it had fallen to as low as US $28.08 per barrel in January 2016. A commiserate fall in petrol and diesel prices did not happen. Instead something different happened- the prices have increased and they have increased only due to the policies which are meant to benefit the oil companies.
The protests held in different part of the country demanded immediate reduction in the excise duty in petrol and diesel. We bring to you the photos from various parts of the country. We will keep on updating it as more photos come to us.
MANDI (Himachal Pradesh)
Joginder Nagar ( Himachal Pradesh)