Govt's excise kitty swells 88% to Rs 3.35 lakh cr

The union government's tax collections on petrol and diesel jumped by 88 per cent to Rs 3.35 lakh crore in the year to March 31, after excise duty was raised to a record high, the Lok Sabha was informed on Monday. The government has collected over Rs 1.01 lakh crore in excise duty in April-June period, while direct tax collection stood at over Rs 2.41 lakh crore, the Finance Ministry said on Monday.

Excise duty on petrol was hiked from Rs 19.98 per litre to Rs 32.9 last year to recoup gain arising from international oil prices plunging to multi-year low as pandemic gulped demand. The same on diesel was raised to Rs 31.8 from Rs 15.83 a litre, according to a written reply to a question given by the Minister of State for Petroleum and Natural Gas Rameswar Teli in the Lok Sabha. This led to excise collections on petrol and diesel jumping to Rs 3.35 lakh crore in 2020-21 (April 2020 to March 2021), from Rs 1.78 lakh crore a year back, he said. Collections would have been higher but for fuel sales falling due to lockdown and other restrictions imposed to curb the spread of the coronavirus pandemic, which muted economic activity and stalled mobility. In 2018-19, excise collections on petrol and diesel were Rs 2.13 lakh crore. To a separate question, the Minister of State for Finance Pankaj Chaudhary said excise collections in April-June this year totalled Rs 1.01 lakh crore. This number includes excise on not just petrol and diesel but also ATF, natural gas and crude oil. The total excise collection in FY21 was Rs 3.89 lakh crore. "Prices of petrol and diesel are market-determined with effect from June 26, 2010 and October 19, 2014 respectively," Teli said. Since then, the Public Sector Oil Marketing Companies (OMCs) have been taking appropriate decisions on the pricing of petrol and diesel on the basis of international product prices and other market conditions. "The OMCs have increased and decreased the prices of petrol and diesel according to changes in international prices and rupee-dollar exchange rate," he said adding "effective June 16, 2017, daily pricing of petrol and diesel has been implemented in the entire country." The hike in taxes last year did not result in any revision in retail prices as they got adjusted against the reduction that was warranted because of fall in international oil prices. But with the demand returning, international oil prices have soared, which have translated to record high petrol and diesel prices across the country. More than one-and-a-half dozen states and union territories have petrol at over Rs 100-a-litre mark and diesel is above that level in Rajasthan, Madhya Pradesh and Odisha. Teli said prices vary from state to state due to freight rates and VAT/local levies.