Nirmala Sitaraman
Nirmala Sitaraman

The coronavirus crisis has led to soaring public spending, especially in the form of rising commodity prices and increased medical expenditure. The pandemic has already hit the common man hard who is reeling under the pressure of job losses and salary cuts. Added to the woes is the rising fuel prices.

Meanwhile, the reports of finance minister Nirmala Sitaraman planning to impose a Covid-19 cess in the upcoming Budget 2021, is making the common man more worried.

FPJ highlights some of the cess/taxes already levied following Covid-19 outbreak

Rising fuel prices:

Crude oil prices in the international market fell below zero in April last year for the first time ever, but still, petrol and diesel prices in India were hovering near Rs 70 per litre and Rs 62 per litre.

Meanwhile in May last year, there was an unprecedented increase in excise duty on petrol and diesel by Rs 10 and Rs 13 per litre.

Today, In Delhi, the price of petrol is 84.20 rupees per litre, while diesel is being sold at 74.38 rupees a litre. Whereas in Mumbai it is 90.83 rupees a litre and that of diesel is 81.07 rupees per litre.

According to the experts, the fall in crude oil prices has not transmitted into the retail prices of petrol and diesel. The plunge in consumption of various fuels during the lockdown period had an adverse impact on the state governments’ revenues. Hence, to take advantage of the cheap raw material, the government is also trying to collect more taxes from fuel, which can be used to offset other losses.

Reports that the Centre may add a cess to excise on petroleum and diesel or on top of customs duties is a matter of concern as it will lead to further rise in the fuel prices.

“The common man in the lower- and middle-income group in the tier II and tier III cities is working very hard to revive the economy. Any further cess imposed by the government which results in the rising petrol or diesel prices will burn a hole in our pockets,” said Vishal Sharma, a bank employee.

Rising toll tax:

Maharashtra government in November last year increased the toll tax for heavy commercial vehicles that ply on state highway by 10 per cent. This in turn resulted in the rise in prices of essential and non-essential commodities, which has already become dearer since the pandemic began. Transporters termed the hike as unwarranted saying that the Covid-19 pandemic has already hit their businesses hard.

Rising LPG prices:

The LPG gas cylinder price continues to rise as the rates charged by oil companies for cooking gas were hiked on January 1,2021. In the national capital Delhi, 19-kg LPG cylinder price has been hiked to Rs 1349 as against Rs 1332 earlier in December last year. The price of a 14.2-kg gas cylinder remains Rs 694.

According to the reports, oil market companies had increased prices of cooking gas twice in December last. In the biggest hike in a single month, oil companies had raised cooking gas prices by as much as Rs 100 in December. The LPG gas cylinder price hike was affected by Rs 50 for the cylinder twice over the fortnight in December.

“The rising prices of LPG is making things difficult for us poor people who are already bearing the burnt of job losses and salary cuts,” said Sanjana, a house wife in Indore.

Reports say that "Proposal for a cess has been discussed," and the preliminary talks revolved around a small cess on taxpayers who fall under the high-income bracket and some indirect taxes.

Meanwhile industry experts also echoed the view of a common man saying, “We want the government to cut excise duty on petrol and diesel to bring down the fuel prices that have touched record highs. Moderation in the central excise duty will provide succour to people who are facing the heat of economic slowdown and income disruption due to the COVID-19 pandemic.”

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