Due to rising oil and gas costs, India’s petroleum and natural gas minister, Hardeep Singh Puri, has advised Fuel taxes are used to benefit the country, oil-producing countries to consider the interests of consumers.” It [fuel taxes] helps us to deliver welfare services,” the minister said, defending the Centre’s imposition of taxes on gasoline and diesel, which are both reaching new highs every day.
- Fuel taxes, according to the petroleum minister, are utilised to support the country’s social demands.
- Taxes account for 54% of the price of gasoline and 48% of the price of diesel.
- Crude oil prices around the world are near three-year highs.
Prices of petrol and diesel are at all-time highs.
On October 23, petrol in Mumbai cost Rs 113.12 per litre and diesel cost Rs 104, making aviation turbine fuel 25-30% more expensive. The retail price of gasoline and diesel, as is well known, includes both central excise duty and state government-imposed VAT, both of which add to the wallet-busting rates. While the combined tax component of petrol is 54 per cent, the combined tax component of diesel is 48 per cent. Motorists will continue to bear the brunt of high fuel prices since neither the federal government nor state governments are willing to give up this significant cash stream. Moreover, CNG costs are rising as well.
According to the Centre, taxes are used to fund social programmes.
Puri told reporters on the sidelines of the India Energy Forum CeraWeek in New Delhi that the central government spends around Rs 32 (of every litre) on satisfying the country’s social requirements. “It helps us deliver welfare services,” he said, noting that state governments had previously fought against bringing fuel costs within GST’s jurisdiction. The minister noted that the government’s ability to distribute a record 100 crore Covid-19 vaccines to Indian residents was only possible because of government revenue.
As we previously reported, in Mumbai, petrol has increased by Rs 20.41 a litre and diesel has increased by Rs 20.91 throughout the 12-month period beginning October 1, 2020. And, since April 1, 2020, when the BS6 emission standards went into effect, petrol has risen by Rs 37.84 per litre and diesel has risen by Rs 38.81 per litre during an 18-month period.
India’s oil marketing firms (OMC), who hedged global crude oil at cheaper prices in the early stages of the epidemic (February-June 2020), are now reaping the advantages in spades. According to industry estimates, OMCs will earn anywhere between Rs 740 crore and Rs 1,490 crore in inventory gains in the current quarter (October-November 2021) of FY2022.
The price of crude oil in the world is rising, which will have an impact on the recovery of the economy.
Due to a number of variables, including a likely reduction in global demand and OPEC and OPEC+’s decision to reduce production cutbacks, global crude oil prices are currently trading at near-three-year highs ($85/bbl). A cartel of oil-producing countries is known as OPEC and OPEC+. Moreover, persistent hurricane-related outages have harmed US production.
Hardeep Singh Puri said the cost of energy should not be allowed to surpass the paying capacity of consuming nations in his closing remarks at the India Energy Forum CeraWeek, citing to the World.
India wants to lessen its reliance on imported energy.
According to Puri, India’s oil and gas industry has advanced significantly in recent years. He went on to say that the Ministry of Petroleum and Natural Gas is focusing on increasing exploration in India in order to lessen reliance on imports. He claims that only six of India’s 26 sedimentary basins have been examined. “We are searching for international partners to join us on our India exploration voyage.” By expanding India’s output of all types of energy, the minister urged global industry and specialists to become partners in India’s shared prosperity. Bank’s most recent Commodity Markets Outlook. The green shoots of global economic recovery will be severely hampered unless crude oil prices are maintained at reasonable levels. The consuming countries must configure this necessity as they develop their future production profiles.
However, this is of little consolation to India’s downtrodden motorists and the commercial vehicle industry, both of which spend a lot of money on travel.