Bhopal (Madhya Pradesh): The rising prices of petrol, diesel, and CNG are breaking the back of the common man but fattening the government's purse.
Keeping in mind the rising prices of crude oil, the central government cut the excise duty of Rs 10 on fuel a month ago to benefit the oil companies.
As a result of the cut in the excise duty, the state government is set to incur a loss of Rs 2,800 crore a year.
Because of the cut in excise duty, the central government will incur a loss of Rs 100,000 crore a year.
Out of this amount, the centre gives Rs 40,000 crore to the states. MP gets 7% of the money given to the states, but it is set to lose this amount this year.
On the other hand, the rising prices of fuel are helping the government to fill in the gap caused by the loss of the amount from the centre.
The state is making profits because the petroleum companies are increasing the prices.
In the past few days, the cost of petrol and diesel has shot up by Rs 3.90 a litre.
In the state, 29% VAT is imposed on petrol, an additional VAT of Rs 2.50 is charged, and 1% cess is taken on each litre of petrol.
Similarly, 19% of VAT is imposed on diesel with an additional VAT of Rs 1.50 and 1% of cess on each litre.
Consequently, as the prices of fuel are increasing, the state government are making profits.
The government will fulfil its loss it has incurred because of a cut in the excise duty.
But the government cannot fulfil the loss it is incurring because of the cut in excise duty.
