Petrol and diesel prices across India are skyrocketing to new heights with every revision. Both the motor fuel prices have already breached ₹100 barrier in many cities. Many other cities are bracing for the fuel prices to hit the century mark. In the meantime, the union minister for petroleum and natural gas Dharmendra Pradhan on Wednesday accused the previous UPA government for the recent incessant price hikes of motor fuel.
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As Dharmendra Pradhan has said, the previous ruling party had left millions of crores of rupees due on the present government. This is resulting in the current government paying both the interest and the price at the same time, Pradhan further added.
"The economists have recently brought a point to the fore. The Congress, before 2014, had left a debt of lakhs of crores of rupees over oil bonds. Due to this reason, the interest and the principal have to be paid off by the current government. This is also a big reason for increase in oil prices," Pradhan was quoted by news agency ANI.
In recent times, since February 2021, motor fuel prices have been increasing rapidly. While the crude oil price hike in the international market has impacted the domestic fuel prices, a major reason behind this is the high rate of taxes imposed by both central and state governments.
The retail price of petrol and diesel comprises several components such as excise duty, freight charges, VAT, dealer commission etc. While the central government imposes freight charges and excise duty, state governments apply VAT. The VAT rate varies from state to state, resulting in varied prices of motor fuels.
The central and state government taxes contribute 60% of pere litre petrol retail price, while the percentage for a litre of diesel is 54%. Despite several appeals by the auto industry and other stakeholders, the central government has denied reducing the excise duty and freight charges.
Talking about the latest price hikes, Dharmendra Pradhan blamed the rise in crude oil prices in the international market as well. He said that crude oil prices in the global market have increased and to fulfil India's domestic needs the country has to import 80% of total oil. This is resulting in rising prices of petrol and diesel.
Pradhan also said that the central and state governments are utilising the taxes received through petrol and diesel for welfare schemes, to provide employment and to undertake development activities.