[carboy]

Originally Posted by sunbaj

Also I would like to add that the Central Govt. is increasing the CESS so that nothing goes to state Govt. and everything remains with the Central

Exactly what I said in my comment. Only the basic excise duty is shared with the states. The Special Additional Excise Duty & the Cesses are in the non-divisible pool & hence go 100% to the Union Govt.

So in the end, State Govts get 60 paise share out of the 33 Rs (approx) Union Tax per litre of Petrol. Rs.32.40 goes to the Union Govt.

[longhorn]

Originally Posted by carboy

It's the central tax (which is absolute & not a percentage) which gets increased constantly. Now, people think that the states also benefit significantly from the increase in central tax because the central tax is shared with the states - but that's not completely true. The different components of the Central tax fall under two diff pools - the divisible pool & the non divisible pool. Almost all of the increases in central tax have come from those components which fall in the non-divisible pool. So out of the 33 Rs (approx) which is collected as central tax per litre, only 60 paise or so goes to that states. Rs 32.40 per litre is kept with the center.

As you have rightly mentioned, barring the first couple of hikes which happened after they came to power in 2014, all subsequent hikes were apportioned to the heads called Additional Excise Duty and/or Special Additional Excise Duty. This simply meant that they got to keep the entire loot and didn't have to share a dime with the states. Not content with this, without an iota of shame, they continued to loot under another head called farmer cess. Now how many farmers got a dime from that is another story altogether. Basically it is these taxes that are being used to cover the mess from demonetisation and other tomfoolery that has happened in the past and is continuing to happen.

To hide the truth and misguide the average joe, they have made very good use of WhatsApp University to propagate all kinds of false information to their benefit. The facts are understood by very few people who are educated and go with an open mind and are able to see through this fake propaganda and acknowledge the facts.

[null]

Paid Rs 112 a litre today in Bangalore. I usually never used to see the price (even though I knew the ball park number of above 100rs).

Frankly, I felt guilty paying soo much for petrol! A basic necessity and its price has gone up 30+% in the last year or so. Uncles are busy forwarding fuel prices world wide on whatsapp, but nobody wants to talk about this 260% taxation on fuel in this country.

[Meph1st0]

Yes, only the Basic Excise Duty component of the Central Excise Duty is shared with the states. This used to be a significant amount before 2014. Post-2014, additional cess (Special Additional Excise Duty, Agriculture Infrastructure & Development Cess (AIDC) and Additional Excise Duty (Road and Infrastructure Cess)) were introduced and these are not shared with the states. Below Data is from Petroleum Planning and Analysis Cell (Link)


The Basic Excise Duty on petrol is just Rs.1.4 whereas the rest of the excise duty amounts to Rs.31.5

The below picture gives a comparison of how much the state share in excise duty has reduced in recent years. (link)



In 2017, 44% (Rs.9.48 out of 21.48) of the collected Excise Duty on petrol was passed on to states whereas in 2021 this share was reduced to a mere 4% (Rs.1.4 out of Rs.32.9). In the case of diesel, the gap is even more. The state's share dropped from 65% in 2017 to 6%.

[Nalin1]

With these prices both petrol and diesel are out of reach of at least 50% of the fuel consuming population .

[adisan]

Slightly OT:
Ever since the petrol prices crossed Rs 100, I modified my driving style on highways and aim for a steady 2500 RPM in top gear. This has helped to increase the mileage, and to decrease the fuel cost per trip.

[jetsetgo08]

Sorry, couldn't resist posting this.

Going by the trend, another Rs.10 hike in a month or 2, it will push many one sect below their current socio-economic status.

Even with the most fuel efficient BS6 petrol car, the running costs are inching closer to Rs.10/km. It is only going to get worse if the offices are re-opened.

[vharihar]

Originally Posted by carboy

Now, people think that the states also benefit significantly from the increase in central tax because the central tax is shared with the states - but that's not completely true. The different components of the Central tax fall under two diff pools - the divisible pool & the non divisible pool. Almost all of the increases in central tax have come from those components which fall in the non-divisible pool. So out of the 33 Rs (approx) which is collected as central tax per litre, only 60 paise or so goes to that states. Rs 32.40 per litre is kept with the center.

Not sure what the context of the discussion was. You're right about the devolution part.

But as regards state tax goes, because it's a percentage on an excise-added part, whenever the central excise taxes increase (which are an absolute number), the state tax in absolute numbers also increases.

BTW, I came across this interesting site:

https://prsindia.org/theprsblog/petr...-diesel-prices

In the above site, Fig 1 lists the state-wise state tax percentages.

[dvl666]

I thought the prices were in control of Individual States.
If not, why would a city like Ganganagar in Rajasthan have a higher price of fuel then Mumbai. Not that I am complaining about the lower price in Mumbai.

Just wanted to understand why this would be the case. Also cant understand why the centre would be blamed for the discrepency!

[vharihar]

Originally Posted by carboy

No, it doesn't. If the increase in Union taxes increase in the non-divisible part of the pool, the state's absolute numbers remain the same.

And most of the Union excise taxes happened in the non-divisible part of the pool.

This has been explained in detail in the last couple of pages. Out of the 33 Rs (approx) of the Union excise on fuel, states get only 60 paise. 32.40 Rs remains with the Union Govt.

You're still refering to the devolution part (the amt that Central govt needs to pass on to states from its portion). You're right about that.

But the separate state tax (which is a percentage, and is shown in Fig 1) is calculated on a base which includes the excise (including cesses and all). So even if excise increases just in cesses, while it us true that devolution remains unchanged, the state tax increases bcoz it is calculated on an increased base. See the article I cited.

[Gansan]

It is not only petrol and diesel. I paid Rs 915 for a cooking gas cylinder today. I remember it was Rs 700 or so during January - February this year.

[Akshay6988]

Originally Posted by Gansan

It is not only petrol and diesel. I paid Rs 915 for a cooking gas cylinder today. I remember it was Rs 700 or so during January - February this year.

It's not just petrol diesel and LPG, every thing is overpriced. You can't buy any veggie below 20₹ a piece ! Coriander, Fenugreek, Spinach it's 20 ₹ everywhere. Cooking oil prices have shot up through roofs, many people (including higher middle class) will fill the pinch now ! For my family of 3 people, a year back groceries budget was about 1500-1700₹ a month, it's been increased to now about 2700-2800₹, depending on what quality of pulses, grains I buy If this doesn't wake up people, I don't know what will !

[ptaneja]

Originally Posted by Gansan

It is not only petrol and diesel. I paid Rs 915 for a cooking gas cylinder today. I remember it was Rs 700 or so during January - February this year.

Paid 908 today @NCR.
And the delivery guy told that order another cylinder in a week, the rates are going to revise after Diwali.

As if this is something new

[PGA]

When the pain goes beyond a threshold, a numbing feeling sets in, it's happened to me, wonder where and when will this fuel price rise stop and give some breathing time atleast. Strange that a democratically elected Govt is so far off from understanding the pulse of the populace. The present rise reminds of old folk tales where mediaeval rulers used to impose such high taxes on local population to fill their coffers or indulge in fantasies.

Frankly the situation today is totally and utterly beyond my comprehension.

[RJK]

Surprisingly the opposition is silent while the fuel prices are going through the roof. All said and done, central govt has no clue how to tackle this problem of revenue deficit, consequently are busy raising prices left-right-centre. I support the govt on many fronts but in this case, there’s no room to see logic in their behaviour. Absolutely headless chicken type situation.

Today afternoon went to Goregaon from Powai, distance of barely 10kms, took me 1hr and 20mins. Colossal waste of fuel, time and money. Entire city dug up, everywhere for “Metro construction”.