Tax weighs heavy on fuel prices in Kolkata

The prices of petrol and diesel are touching record high in Kolkata, along with other cities of the country. But, it is not just the surge in crude oil prices globally that led to this spike – there has been a subsequent rise in taxes (mainly central) as well in last one year that’s also behind this historic high.

Sources in oil companies pointed out that if they consider an ideal zero tax situation (both central and state) then petrol would have cost Rs 37-Rs 38 per litre while diesel would have been Rs 35-36.

The tax component in petrol in Kolkata is around Rs 48-Rs 49/litre, while in diesel it is Rs 41-Rs 42. Interestingly, the price of crude per barrel is now $53-$54, which had touched a rock bottom during full lockdown across the world to $19 per barrel in April.

However, the crude prices touched an average $93-$94 in 2014 after which it started coming down. The average petrol price in Kolkata in December 2014 was Rs 74, while that of diesel was Rs 56.

Gyan Agarwal, a leading petroleum dealer, said that despite a higher crude price in 2013-14, petrol and diesel price at that point of time was lower than now. He also added that there has been additional central taxes since October 2019, though state taxes as a percentage have remained at 25% for petrol and 17% for diesel. However, along with central, the state taxes component also went up as the taxes are ad-valorem in nature.

The taxes in petroleum products include customs duty, excise duty, cess and sales tax. There has been additional excise duty also along with countervailing duties (CVD).

Times Of India
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