Even as the Opposition has upped the ante against the NDA government over the skyrocketing fuel prices, oil marketing companies have desisted from hiking petrol and diesel rates over the past 10 days or so. This lull after the storm has coincided with the announcement of the Assembly elections in four states and a union territory. Speculation is rife that the Centre, finding itself on a sticky wicket, might have nudged the oil firms to freeze the prices for a while. With taxes accounting for the bulk of the retail selling price of petrol and diesel, fuel taxation is a major money-spinner for the government. Oil Minister Dharmendra Pradhan told Parliament on Monday that the tax collected on these two fuels was Rs 52,537 crore in 2013; it rose to Rs 2.13 lakh crore in 2019-20 and reached nearly Rs 3 lakh crore in the first 11 months of the ongoing financial year — a five-fold increase in less than eight years.
The government has managed to make its coffers swell through thick and thin, but it has been a no-win situation for the consumer all along. Between November 2014 and January 2016, the excise duty on petrol and diesel was raised on nine occasions to cash in on the plummeting global oil prices. In March last year, the disruptions caused by the outbreak of the pandemic were cited for imposing a stiff hike in taxes so as to prop up the tottering economy. Now, with the firming of prices in the global oil market, the masses are again at the receiving end.
It’s the fear of electoral setbacks more than the plight of the common man that might prompt the government to take drastic action soon. According to a report prepared by a leading brokerage firm, the budgetary target of tax collection of Rs 3.2 lakh crore can be achieved even if excise duty on petrol and diesel is cut by Rs 8.5 per litre on or before April 1. This should give the government another reason to do the needful and pacify the hapless populace before it’s too late.