It is July, and fortunately, gasoline and diesel prices have not changed for two days. The last interest rate hikes for these two fossil fuels were on June 29, 28 pesos (gasoline) and 24 pesos (diesel) respectively.
- The consumption tax on July 1 is the same as on June 1
- Crude oil prices are not expected to fall in the short term
- Value-added tax (VAT) increases by 99 paisa per liter of gasoline
There were 16 price increases in June-the same as in May 2021-which increased the price of gasoline in Mumbai by Rs 4.18 per litre and the price of diesel by Rs 4.03 per litre. After the Petroleum Marketing Company (OMC) resumed price increases on May 4, fuel prices have continued to rise since May.
Looking at the price lists of the four metro cities in India above, you will find that Delhi’s motorists have the largest increase (4.32 rupees per liter), followed by Mumbai (4.18 rupees per liter), Kolkata (4.14 rupees per liter) and gold Nai (3.81 rupees per liter). The consumption tax on July 1 is the same as on June 1, at Rs 32.90.
What the price increase data reveal
According to data on the increase in gasoline prices in Delhi, the basic price of gasoline has increased by 3.3 rupees per liter for more than a month. Dealers are paying, but the commission per liter has increased by 3 paisa, even if the freight cost per liter rises unchanged. , For 36 paisa. The value-added tax (VAT) increases by 99 paisa per liter.
With regard to diesel, the accumulation of price increases in one month shows that the basic price of this fuel has risen by 3.25 rupees per liter, and the value-added tax has risen by 54 paisa per liter. The consumption tax remains unchanged at Rs 31.80 per liter.
One of the reasons for the soaring fuel prices is the high level of central and state taxes. For example, in Delhi, consumption tax accounts for 33.29% (32.90 rupees) of the price of gasoline per liter (98.81 rupees). Add the 23.07% value-added tax (22.80 rupees) and you get 56.36% (55.70 rupees) of the gasoline price. This is the tax that consumers will pay when they use gasoline in Delhi today.
This is the same wallet destruction story as Diesel, but slightly different. The percentage of consumption tax is even higher-35.65% (31.80 rupees), while Delhi’s value-added tax is 14.62% (13.04 rupees) of the retail price of 89.18 rupees per litre. Together with consumption tax and value-added tax (44.84 rupees), they account for 50.28% of the final retail price of diesel in Delhi today: 89.18 rupees per litre.
Global crude oil prices firm
The increase in gasoline and diesel prices is a direct impact of the significant increase in global crude oil prices, which in turn is the result of major global economies such as the United States, Europe and China re-entering work mode after the impact of the epidemic.
Brent crude oil is trading at $74.69 today, which is higher than S70.35 on June 1 a month ago. Under these global trends, crude oil prices are not expected to fall soon. Therefore, unless the central government and state governments decide to reduce taxes on these two fuels, Indian motorists will have to deal with high gasoline and diesel prices for a while.
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