Former Finance Minister P Chidambaram on rising fuel prices
New Delhi:
Former Finance Minister P Chidambaram told NDTV that the increase in the prices of petrol and diesel through taxes levied by the central government is extortion for the consumers. On rising fuel prices in an exclusive interview to NDTV, Mr Chidambaram said, “One-third of the price of petrol that consumers pay is tax to the central government, therefore, 33 per cent taxation on any item is extortion.”
Giving details of fuel prices, Mr. Chidambaram explained that if a consumer pays Rs 102 per liter for petrol, Rs 42 goes to oil companies (OMCs) – which include processing of crude oil into fuel, 33 goes for Rs. As central government tax, Rs 24 goes to the state government, and Rs 4 goes to the dealers. “Rs 33 out of Rs 102 is about 33 per cent. This, according to me, is extortion,” the former finance minister said.
The top politician’s remarks come at a time when petrol and diesel prices are rising in India, driven by a rise in global crude oil rates. Globally, oil prices rose to a three-year high of $85 a barrel today, on forecasts of a supply deficit over the next few months due to rising demand due to the easing of travel restrictions, according to Reuters news agency.
Petrol and diesel prices continued to rise on Friday, October 15, following a jump in global crude oil prices. According to the Indian Oil Corporation, the rates of petrol and diesel in the national capital jumped by 35 paise to Rs 105.14 and diesel is being sold at Rs 93.87 per liter respectively.
Describing the PM Modi-led government as the most greedy government ever, Mr Chidambaram said progressive taxes should be increased and the Center should stop relying on a single source of revenue to collect its expenditure. “The tax on petrol and diesel is regressive as the amount of tax paid on fuel by a rich and a poor person is the same,” claimed Mr. Chidambaram.
Government oil refiners in India such as Indian Oil, Bharat Petroleum and Hindustan Petroleum revise fuel rates on a daily basis, taking into account crude oil prices and rupee-dollar exchange rates in international markets.
Meanwhile, global supplies are expected to remain tight due to a sharp decline in oil reserves in the United States and member countries of the Organization for Economic Co-operation and Development. On Thursday, the International Energy Agency said oil demand was expected to rise by 500,000 barrels per day (bpd) from the energy crunch, according to Reuters.
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