FUEL PRICES
Energy Agency and International Energy Forum, which organised the video conference.
“We need to adopt a balanced approach at this juncture. It is in this spirit of allowing demand recovery to take primacy over crude prices, at least over the next few months, I am appealing for easing of production cuts by the key oil exporting countries, including the OPEC and OPEC Plus group. I have always maintained that prices should be reasonable and responsible, which means that we do not favour too low crude prices also,” he added.
PM Modi, too, addressed the issue, though not specifically in the context of the price in Sri Ganganagar. “India imported over 85% of its oil needs in the 2019-20 financial year and nearly 53% of its gas requirement. Can we be so import dependent? I don’t want to criticise anyone but I want to say (that) had we focussed on this subject earlier, our middle-class would not have been burdened,” he said at a virtual function to inaugurate oil and gas projects in poll-bound Tamil Nadu. He invited the “world to come and invest in India’s energy sector”, pointing out that the country is spending ₹7.5 lakh crore over the next five years to develop oil and gas infrastructure. By 2030, India will generate 40% of all its energy needs from renewable sources, the Prime Minister added. Wednesday’s spike reignited the debate over government taxes. Rajasthan chief minister Ashok Gehlot said in the state assembly on Monday that the Union government was “responsible for the high fuel prices by not reducing the taxes”. “If we reduce the taxes than our revenue will decline. In view of the public sentiments, despite the pandemic, the state reduced 2% VAT (value added tax) bringing a loss of ₹1,000 crore. Now, the Centre should reduce the taxes to lessen the burden on people,” he said.
Taxes account for more than 60% of the pump price of fuel. Part of these are central taxes and part, those levied by the state. In the case of Delhi, data available on the Indian Oil website shows that central excise duty and state value added taxes added ₹32.9 and ₹20.61 per litre to the cost of petrol. The base price, freight and dealer commission amounted to just ₹35.78 per litre for petrol. In effect, almost 60% of what people pay for petrol is taxes. Sri Ganganagar pays the highest rate for the fuel since it is the furthest from a nearby dispatching facility.