Petrol, Diesel price hikes: How do prices stack up vs neighbouring countries?
Across the country we have seen protests by Congress party supporters against the nearly daily hike in petrol and diesel prices over the last 22 days. Petrol and Diesel prices were raised once again after a break yesterday. In fact there has been a daily increase in fuel prices for three weeks now. Petrol price has gone up 11.4% in June from Rs 71.26 to Rs 80.43 per litre in Delhi. Diesel prices have increased 13.8% from Rs 69.39 to Rs 80.53 per litre.
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Members of Delhi Pradesh Congress Committee detained by police while protesting near IP College against continuous hike in fuel prices.
Both petrol and diesel are taxed very heavily in our country by both the centre and the states. The government had hiked excise duty on petrol by Rs 10 and diesel by Rs 13 on May 6, 2020. After this hike, if hypothetically, you were paying Rs 100 for petrol, Rs 70 was being collected in taxes and only Rs 30 was imported price of crude oil.
Unlike direct taxes or income tax which is collected by people based on the income they earn, taxes on fuel like excise and VAT are indirect taxes which get added to every product we buy which is transported over the country, be it a tomato or a laptop. So the incidence of indirect tax for same product is identical, whether you pull a rickshaw or drive a Mercedes.
Nearly 85% of India’s oil needs are met by imports. And like its neighbouring countries, it depends on imports to meet oil demand. Our local prices still remain lower than what is charged for petrol in some of our neighbouring countries like Pakistan and Bangladesh, even after the recent price hikes.
Price of Petrol in Indian Subcontinent
|Name||Petrol price on Mar 23, 2020||Petrol price on June 22, 2020|
|India||Rs 72.37||Rs 82.7|
|Pakistan||Rs 111.59||Rs 100.1|
|Bangladesh||Rs 89||Rs 89|
|Nepal||Rs 106||Rs 96|
|Srilanka||Rs 161||Rs 161|
(Prices are calculated in local currency, source: globalpetrolprices.com)
Each country may have different level of taxes, different parameters for determining local prices and will also be affected by exchange rate movements. The base price determinant is of course international crude prices. The hope is that we will not see a huge upward pressure on crude prices because demand is likely to be depressed owing to corona pandemic across the world.