Free Press Journal

Fuel Price Hike: Petrol can be cheaper by Rs 9 per litre in Mumbai if the government scraps the cess


petrol price hike, petrol price, K R Sudhaman, GDP, economy

Mumbai: The ‘achche din’ have become a slur, or at least a butt of ridicule, with pan India fuel prices reaching an all-time high on Monday. In fact, the prices, already at unprecedented levels, rose for the ninth consecutive day on Monday. Incidentally, Mumbai seems to be bearing the cross with petrol priced at Rs 86.56 per litre, as against Rs 79.15 in the national capital; in Kolkata and Chennai it was hovering at Rs 82.06 and Rs 82.24 per litre, respectively. Diesel was selling at Rs 75.54 per litre in Mumbai with the difference between the two fuels narrowing by the day.

State Finance Minister Sudhir Mungantiwar expressed his helplessness in bringing down the price in Mumbai, even though it is well within his ambit to reduce the liquor and an ‘additional’ cess on petrol, which the petrol dealers’ association claims would entail a net saving of Rs 9 a litre. The state government had in 2014 imposed a drought cess of Rs 2 per litre on petrol across the State to assist the drought-prone Marathwada region.  “It was the need of the day and hence the cess was introduced. But, later we removed it and gave an exemption of Rs. 3067 crore to the people,” claimed Mungantiwar. He added that the ‘drought’ cess now has another name – ‘additional tax’.  He likened it to a girl going to her husband’s home after marriage and changing her surname.

According to Uday Lodh, president of Federation of All Maharashtra Petrol Dealers Association, the basic price of petrol is approximately Rs 33 and, of diesel, it is Rs 37 per litre. “The government charges 65 percent tax on the basic price. The Maharashtra state has imposed various cess that add up to Rs 9 per litre on petrol and Rs. 1 on diesel.Apart from the cess, there are state and central taxes, including excise and custom duties which cannot be tweaked without either consulting the Centre or burning a hole in the government coffers.  Says Mungantiwar, “It is just not in our hands. The rate depends upon the international rate of crude oil. That is why the rate had touched Rs 83.56 in 2013.’’ The only option then is to bring petrol under GST, say exasperated citizens.