Oil minister Dharmendra Pradhan on Sunday said Congress-led governments in Rajasthan and Maharashtra should cut high sales tax on petrol and diesel if the party was concerned about the fuel price burden on common man.
The minister but did not say if BJP-ruled states such as Madhya Pradesh and Karnataka, where petrol has crossed the Rs-100-mark, would do the same.
Petrol and diesel prices have risen to all-time highs across the country after fuel rates rose by Rs 5.72 per litre to Rs 6.25 per litre in less than six weeks. This is due to a combination of rising international oil prices and record high central and state taxes. Central taxes in Delhi make up 38 per cent of the price of petrol, while state levies make up another 23 per cent.
Talking to reporters on the sidelines of an event organised to inaugurate an oxygen plant set up by Indraprastha Gas Ltd at Maharaja Agrasen Hospital, Pradhan said central and state governments need additional money from the taxes on petrol and diesel to meet the expenses to fight the pandemic as well as on development work.
“I accept that fuel prices are pinching consumers,” he said, adding the government is spending Rs 1 lakh crore on providing free foodgrains to poor this year alone, besides spending money on vaccines and healthcare infrastructure.
Asked about Congress leader Rahul Gandhi’s repeated attacks on the Modi government for skyrocketing fuel prices, Pradhan said, “Why is fuel expensive in Maharashtra, Rajasthan and Punjab (which are ruled by non-BJP parties)?”
“If Rahul Gandhi is concerned about the poor being hit by fuel prices, he should ask the chief ministers of Congress-ruled states to cut taxes. He should ask (Maharashtra chief minister) Uddhav Thackeray to reduce taxes,” he said.
Later nuancing his remarks, Pradhan said he has never done politics on taxes but if someone wants to make an issue out of high taxes they should first set their house in order.
“I fully understand that the money collected from taxes on fuel goes into a lot of social welfare schemes and development work. I have never bickered over this. But if Rahul Gandhi wants to make an issue out of only one part of the taxes, I will have to say that they (Congress) have to look at the taxes in their own states, which are the highest in the country,” he said.
Fuel prices differ from state to state depending on the incidence of local taxes such as VAT and freight charges. Because of this, petrol retails at over Rs 100 per litre mark in seven states and Union Territories —Rajasthan, Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Karnataka and Ladakh.
Of these states, the Congress is in power in Rajasthan and is a coalition partner with th Shiv Sena and NCP in Maharashtra. The BJP rules Madhya Pradesh and Karnataka and Ladakh too is under central rule. Andhra Pradesh has YSR-Congress in power, while TRS rules in Telangana.
Rajasthan levies the highest value-added tax (VAT or sales tax) on petrol and diesel in the country, followed by Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana and Karnataka.
International oil prices have crossed $72 per barrel in anticipation of demand recovery following the rollout of vaccination programme by various countries.
Last year when rates collapsed to a two-decade low, the Union government instead of passing on the benefit to consumers raised the excise duty to record highs.
The excise tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014, and that on diesel was Rs 3.56 a litre.
Sri Ganganagar district of Rajasthan near the India-Pakistan border was the first place in the country to see petrol hitting th Rs 100-a-litre mark in mid-February.
