New Delhi: The cash-strapped government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record increase in excise duty on petrol and diesel, that will help make up for revenue it lost in a slowing economy and shutting down of businesses due to coronavirus lockdown. Also Read - Petrol, Diesel Prices in Puducherry to be Costly From May 29 | Know Here Why
Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low. This is the second hike in excise duty in less than two months and will help government garner over Rs 1.7 lakh crore in additional revenues annually at 2019-20 level of consumption, industry officials said. Also Read - COVID-19 Disruption May Push Centre to Further Hike Duty on Petrol, Diesel
Considering the slump in consumption due to travel restrictions imposed by coronavirus lockdown, the gains in the remaining 11 months of the current fiscal year (April 2020 to March 2021) will be close to Rs 1.6 lakh crore, they said. Together with Rs 39,000 crore in annual revenues gained from the March 14 excise duty hike of Rs 3 per litre each on petrol and diesel, the government stands to gain as much as Rs 2 lakh crore. Officials said normally retail prices would have changed with any revision in taxes but like March 14, there is no change as the excise duty hike is being adjusted against the gains consumers should have got from Brent crude oil dipping to about USD 18 per barrel – the lowest since 1999. Also Read - 'Economically Anti-national': Congress Slams Centre For Increasing Fuel Price During Lockdown
According to a notification issued by the Central Board of Indirect Taxes and Customs, special additional excise duty on petrol has been hiked by Rs 2 per litre and road cess has been hiked by Rs 8 a litre. In case of diesel, special additional excise duty has been hiked by Rs 5 per litre and road cess has been raised by Rs 8 a litre.
With this, the total incidence of excise duty on petrol has risen to Rs 32.98 per litre and that on diesel to Rs 31.83. Petrol costs Rs 71.26 a litre in Delhi and a litre of diesel comes for Rs 69.39. Central excise duty makes up for 46 per cent of petrol and diesel price now.