States to get Rs 227 billion windfall from rupee plunge, crude spike

Postado Setembro 12, 2018

In Delhi, petrol costs Rs 80.87 and diesel Rs 72.97.

The Delhi High Court today refused to issue a direction to the Central government to fix a "fair price" for petrol and diesel as per Section 3 (1) the Essential Commodities Act, 1955.

The incessant increase in fuel prices may have given the Opposition a convenient tool to beat the government with. An increase of $1 a barrel in crude oil price translates to Rs 15.13-billion revenue gain, on an average, to all the major 19 states, the report said.

To this, the PIL alleged that "instead of passing the lower oil prices to ease the burden on consumers, Respondent as well as State Govt. increased taxes to meet their fiscal deficit commitments". Petrol prices on Tuesday touched a scorching Rs 90.11 in Maharashtra's Parbhani while diesel prices also increased from Rs 77.92 to Rs 78.06, Parbhani District Petrol Dealers Association (PDPDA) President Sanjay Deshmukh said. The new petrol and diesel prices will be applicable from Tuesday morning (September 11). However, this will result in a revenue loss of around Rs 12,000 crore (net of Rs 34,627 crore loss and Rs 22,700 crore gain from oil bonanza) to the states. Rajasthan has cut petrol and diesel prices by Rs 2.5 per litre, Andhra Pradesh by Rs 2 and West Bengal by Re 1.

Meanwhile, Maharashtra minister of state for home and finance Deepak Kesarkar said chief minister Devendra Fadnavis is looking at all possible options to reduce the rise in petrol and diesel prices.

Telangana chief minister K Chandrasekhar Rao has dissolved the state assembly and is going for early elections in November/December, while his Andhra Pradesh counterpart N Chandrababu Naidu wants to continue in power till the completion of his full term.

If the States imposed Value-Added Tax on base price (i.e. crude oil + transportation cost + commission), the diesel prices could drop by as much as ₹3.75 and petrol by ₹5.75, the report said.