Home Auto Industry News New FY2021, the government collected Rs 3,34,894 crore from excise duty on petrol and diesel

New FY2021, the government collected Rs 3,34,894 crore from excise duty on petrol and diesel

by Navyatha Sandiri
excise duty on petrol and diesel

In FY2021, the central government collected Rs 3,34,894 crore from excise duty on petrol and diesel, according to details revealed in the Parliament on July 19. When it comes to excise duty on petrol and diesel, the contribution was more than twice as high, at Rs 2,33,296 crore.

  • Petrol and diesel prices increased 76 and 73 times, respectively, in FY2021.
  • with excise duty collection increasing by nearly 88 percent over FY2020.
  • Increased collection due to excise duty increase in FY2021

This represents an increase of 87.81 per cent over FY2020’s combined petrol-diesel excise duty collections of Rs 1,78,311 crore (YoY). Despite lower vehicle usage and fuel purchases in the first few months of the last fiscal year due to the pandemic, excise duty collections have increased due to fuel price hikes.

Diesel, which outsells petrol by a wide margin in India, had an excise duty of Rs 15.83 per litre (from July 6, 2019). Rs 18.83 (from March 14, 2020) and Rs 31.83 (from March 14, 2021). (from May 6, 2020). This represents an increase of 16 rupees per litre – 3 rupees over petrol. Diesel generates more than twice the amount of excise duty than petrol.

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Per litre price

Rameswar Teli, Minister of State for Petroleum and Natural Gas, informed the Lok Sabha that the price of petrol would increase 76 times and that of diesel by 73 times in FY2021. Petrol in New Delhi increased in price by Rs 20.97 per litre in the 12 months from April 1, 2020, to March 31, 2021. A petrol litre in Mumbai costs Rs 21.70 more than a diesel litre in Delhi.

According to the data, the price of petrol was cut 10 times and that of diesel 24 times. There have been no price increases or decreases for petrol or diesel for 153 days.

While the Centre raised excise duty consistently throughout the year, most states also increased their Value Added Tax (VAT) rates (VAT).

Petrol and diesel prices are heavily taxed.

excise duty on petrol and diesel

The high level of Central and State taxes is one of the reasons for the high fuel prices. A litre of petrol in Delhi will cost Rs 101.54 on July 16, 2021, of which 32.40 per cent (Rs 32.90) is excise duty and 23.43 per cent is state sales tax. If you add the two taxes together, you get Rs 56.33 or 55.467 per cent per litre of gasoline.

On July 16, diesel in Delhi cost Rs 89.87 a litre. The excise duty component was Rs 31.80, or 35.38 per cent, while the VAT component is Rs 13.14, or 14.62 per cent. A motorist pays Rs 44.94, or 50 per cent of the price of diesel if both taxes are added up.

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Fuel prices will go down?

Expecting petrol and diesel prices to fall soon is too much of a hope. It’s true that OPEC has agreed to increase supplies by 400,000 barrels per day starting in August 2021, but this amount is too small to cause any significant drop in crude oil prices.

Demand for transportation and shipping services is increasing as global economies – particularly in the United States and Europe – resume work. The price of the crude oil basket is a good example of this. A year after the price of crude oil plummeted to $19.90 a barrel when the world first felt its effects, the price has steadily risen to around $70 a barrel in recent months.