The government has hiked the excise duty on fossil fuels for the third time this month. The most recent hike has resulted in an increase of Rs 1 per litre of petrol and Rs 1.50 per litre of diesel. These price hikes have come ahead of the Budget and have resulted in Rs 3,200 crore in additional revenue, bringing the net total for 3 months up to Rs 17,000 crore.
Despite this, PTI reports that the retail price of the fuels will remain unchanged as the price hike would balance out the drops in rate which may only have been possible because the cost of oil has been crashing internationally. The excise duty on normal unbranded petrol has gone up from Rs 8.48 per litre to Rs 9.48 whereas in the case of normal unbranded diesel, the cost has gone up from Rs 9.83 to Rs 11.33, stated a notification of the Central Board of Excise and Customs (CBEC). The increase will see the government collect over Rs 3,200 crore during the remainder of the current fiscal.
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The month of January has seen 3 hikes in excise duty. 2 January saw per litre hikes of Rs 0.37 on petrol and Rs 2 on diesel which fetched the government a bit less than Rs 4,400 crore. The next increase came on 16 January when the excise duty per litre was hiked by Rs 0.75 on petrol and Rs 2 on diesel which resulted in an additional revenue collection to the tune of Rs 3,700 crore.
Besides the 3 price hikes on petrol and diesel witnessed this month, November and December 2015 also saw fuel prices go up which means that the tax rates on both fossil fuels have been raised 5 times this fiscal. Beginning November saw the duty on petrol and diesel increase by Rs 1.60 per litre and Rs 0.30 per litre respectively resulting in a revenue collection of Rs 3,200 crore whereas December saw an increase of Rs 0.30 per litre and Rs 1.17 per litre for petrol and diesel respectively netting the government Rs 2,500 crore.
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As a result, the total combined revenue generated by hiking petrol and diesel costs this fiscal stands at over Rs 17,000 crore. This additional revenue will be used by the government to meet its budgetary deficit. A similar method was adopted in the previous fiscal as the 4 increases in excise duty resulted in the government netting around Rs 20,000 crore to help meet their fiscal deficit target. 2014-2015 saw the government collect Rs 99,184 crore in excise collections from the petroleum sector. In contrast, the first quarter of the current fiscal saw an excise collection of Rs 33,042 crore.
