Petrol Prices to Stay High: Here’s Why State Govts Can’t Bring Relief

It was at Rs 99,068 crore in 2014-15 and it had jumped to Rs 3,71,726 crore in 2020-21. The jump between 2019-20 and 2020-21 was around 67%. This happened in the middle of the covid pandemic. The state government sales tax/VAT on petroleum products has gone up from Rs 1,37,157 crore to Rs 2,02,937 crore during the same period. As can be seen, it had been largely flat over the last few years.

The major reason for this lies in the fact that the central government taxes on petrol and diesel have gone up. The central government tax on diesel has gone up from Rs 4.50 per litre in 2014-15 to Rs 31.80 per litre currently. This is a rise of 607%.

When it comes to petrol, the central government tax has gone up from Rs 10.39 per litre in 2014-15 to Rs 32.90 per litre now, a rise of 217%. This has led to a massive increase in tax collections from sale of petroleum products at the central government level.

In fact, between 2014-15 and 2020-21, the size of the Indian economy has increased. We…

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