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Excise duty on petrol was Rs 9.48/ltr, diesel Rs 3.56 in 2014: Minister

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Excise duty on petrol was Rs 9.48 per litre and Rs 3.56 on diesel when BJP came to power in 2014 before it rose to a record Rs 32.98 and Rs 31.83, respectively, in May 2020, Parliament was informed on Monday.

Excise duty on petrol and diesel was cut by Rs 13 a litre and Rs 16, respectively, between November 2021 and May 2022, according to a written reply by Minister of State for Petroleum and Natural Gas Rameswar Teli.

The Union government earned Rs 1.72 lakh crore from the petroleum sector in duties and taxes in the 2014-15 fiscal, which rose to over Rs 4.92 lakh crore in 2021-22, he said.

The contribution of the sector to the states rose from Rs 1.6 lakh crore to Rs 2.82 lakh crore.

The rise in the central government’s earnings from the petroleum sector was 186 per cent during the seven-year period, while the states got 75 per cent high revenue from the sector, according to Teli’s reply.

The Union government raised excise duty on petrol and diesel on 10 occasions between November 2014 and January 2016 to take away gains arising from a fall in international oil prices.

In all, excise duty on petrol was raised by Rs 12 per litre and that on diesel by Rs 13.77, according to the reply.

The government cut excise duty on petrol and diesel by Rs 2 a litre in October 2017. The tax was again cut by Rs 2 per litre on petrol and by Rs 1.5 on diesel a year later.

But in July 2019, the tax was hiked by Rs 2 per litre each, it showed.

When international oil prices came crashing in 2020 after the onset of the pandemic, the government hiked excise duty on petrol by Rs 13 a litre and by Rs 16 on diesel in two instalments between March 2020 and May 2020.

These increases were rolled back in November 2021 and May 2022. Excise duty on petrol now stands at Rs 19.90 a litre and that on diesel at Rs 15.80, as per the reply.

“Prices of petrol and diesel have been market-determined with effect from June 26, 2020, and October 19, 2014, respectively. Since then, the public sector oil marketing companies (OMCs) take appropriate decisions on pricing of petrol and diesel,” Teli said in a separate reply.

The prices of petroleum products in the country are linked to the price of respective products in the international market.

“The Government has made interventions by way of calibrating excise duty rates on these products as and when required,” he said, adding the tax on petrol and diesel was reduced by Rs 5 and Rs 10 per litre effective from November 4, 2021, and Rs 8 and Rs 6 per litre, respectively effective, from May 22, 2022.

The reduction came as the inflation rate and prices of daily essential items soared.

“The impact of increase/decrease in prices of petrol and diesel can be assessed through their impact on inflation measured by Wholesale Price Index (WPI).

“The weightage of petrol, diesel and LPG in the WPI index is 1.60 per cent, 3.10 per cent and 0.64 per cent, respectively,” he added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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