In what is a welcome relief to millions of motorists and the transportation industry in India, the prices of petrol and diesel, which have scaled record levels, have remained unchanged since July 17. Seventeen days since then, motorists continue to pay the same price.
Of the four metros, fossil fuel prices are the highest in Mumbai where a litre of petrol costs Rs 107.83 a litre and diesel Rs 97.45. The Delhi motorist pays Rs 5.99 less for a petrol litre (Rs 101.84) and Rs 7.58 for a diesel litre (Rs 89.87) than its Mumbai counterpart.
One of the reasons for the wallet-busting fuel prices is the high level of Central and State taxes. For instance, in Delhi, on August 3, 2021, petrol cost Rs 101.84 a litre of which 32.30% (Rs 32.90) comprises excise duty and 23% (Rs 23.50) is State VAT. Club the two taxes and motorists are paying Rs 56.40 or 55.38% of each petrol litre as tax.
As regards diesel which cost Rs 89.87 a litre in the capital city on July 16 and is the same today, the excise duty component is Rs 31.80 or 35.38%, while VAT is Rs 13.14 or 14.62% of the retail price. Together, the two taxes account for Rs 44.94 or exactly 50% of the price a motorist pays to tank up on diesel.
In FY2021, the Centre got Rs 334,894 crore excise duty from petrol and diesel. The unabated increase in the price of fuels has exacerbated since end-April, after the election process in five states concluded.
Motorists had for close to two months before that seen a welcome stoppage in fuel price increases. With prices remaining unchanged for 17 days on the trot, motorists will be a relieved lot but will also be hoping that taxes are cut and prices reduced.
The monsoon session of Parliament has commenced from July 19 and will conclude on August 13. Will prices continue to remained unchanged till mid-August? The answer is blowing in the wind.