Dharmendra Pradhan: LPG price double in 7 years; tax collection on petrol, diesel jumps 459%

Small price raises in the past few years have eliminated subsidy on cooking gas as well as PDS kerosene. Oil Minister Dharmendra Pradhan said the price of domestic subsidised LPG has been raised during the last few months. It was Rs 594 per cylinder in December 2020 and now it costs Rs 819.

Price of domestic cooking gas, LPG has doubled in last seven years while the increase in taxes on petrol and diesel has expanded by over 459%, Pradhan said on Monday. In written replies to questions on rising fuel prices in the Lok Sabha, he said the retail selling price of domestic gas was Rs 410.5 per 14.2 kg cylinder on March 1, 2014. This month, the same cylinder costs Rs 819.

Similarly, kerosene sold to the poor through the public distribution system (PDS) has risen from Rs 14.96 per litre in March 2014 to Rs 35.35 this month. Petrol and Diesel prices are also at all-time high across the country.

“Prices of petrol and diesel have been made market determined by the government with effect from June 26, 2010 and October 19, 2014 respectively,” Pradhan said. “Since then, the public sector OMCs are taking appropriate decisions on pricing of petrol and diesel. Along with them the international product prices, exchange rate, tax structure, inland freight and other cost elements are also regulated.”

While taxes are accounting for the bulk of the retail selling price of petrol and diesel, the tax collected on both the fuels was Rs 52,537 crore in 2013. It rose to Rs 2.13 lakh crore in 2019-20 and further increased to Rs 2.94 lakh crore in the first 11 months of current fiscal year.

He said the government levies Rs 32.90 per litre excise duty and Rs 31.80 a litre on petrol and diesel respectively. He added that excise duty on petrol was Rs 17.98 a litre in 2018 and Rs 13.83 on diesel. Between November 2014 and January 2016, the government had raised excise duty on petrol and diesel on nine occasions in order to take away gains arising from plummeting global oil prices. The total excise collection from all the fuels has increased from Rs 2.37 lakh crore in 2016=17 to Rs 3.01 lakh crore during April-January 2020-21.

In all, the duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by Rs 13.47 litre in those 15 months. In May 2020, the government hiked excise duty on petrol by Rs 10 per litre and on diesel by Rs 13 a litre.