Petrol costlier in India than in neighbours, US

November 29th, 2011 - 8:22 pm ICT by IANS  

New Delhi, Nov 29 (IANS) Petrol costs more in India when compared to neighbouring countries like Pakistan, Bangladesh, Sri Lanka and is even dearer than what is charged in the US, the petroleum ministry said in a written reply in the Rajya Sabha Tuesday.

According to the reply by Minister of State for Petroleum R.P.N. Singh, one litre of petrol costs Rs.48.64 in Pakistan, Rs.52.42 in Bangladesh and Rs.61.38 in Sri Lanka. In India, the fuel costs Rs.66.42, despite oil marketing companies reducing prices Nov 16.

Even in the US, petrol costs much less — at Rs.44.88 a litre.

However, the fuel costs much more in the UK, with a litre of petrol going for Rs.104.60.

The government has always been criticised for the skewed tax structure on petrol and diesel. The minister, however, said the central government’s revenue does not increase with increase in the price of these products as the excise duties were specific.

The excise duties on petrol are currently at Rs.14.78 per litre, and on diesel Rs.2.06 per litre, said Singh.

After the last downward revision of Rs.2.22, petrol now retails at Rs.66.42 in Delhi. However, diesel costs much less at Rs.40.91 in the national capital.

But states levy a host of other taxes such as sales tax, value added tax (VAT) and entry tax.

“Whenever there is an increase in retail selling prices of these petroleum products, the state governments’ sales tax/VAT collection goes up correspondingly,” Singh said.

Illustrating the states’ increase in revenue due to hike in fuel prices, the minister said for every Re.1 increase in petrol price per litre, the Delhi government raked in 20 paise as the VAT rate in Delhi was 20 percent.

Similarly, for every Re.1 increase in price of a litre of diesel, the Delhi government raked in 12.5 paise in taxes as the VAT rate for the fuel was 12.5 percent.

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