InvestorQ : How come the government excise duties collections from petrol and diesel is up this year while all other tax revenues are falling?
Katherine Gonsalves made post

How come the government excise duties collections from petrol and diesel is up this year while all other tax revenues are falling?

Answer
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rhea Babu answered.
5 months ago
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The reason is simple. Over last 5 years, government has literally made the best of weak crude oil prices. They have been hiking excise duties on petrol and diesel. For example, in the first 7 months of FY21, central government receipts from excise duty on petrol / diesel were up 40% yoy at Rs.160,000 crore.

How did this happen when in the same period income flows from corporate taxes, personal income tax and GST showed 20-30% contraction. Please note that since Mar-20, government hiked duties on petrol and diesel in two tranches. That virtually added Rs.13/litre to petrol and Rs.16/litre to diesel as an outcome of higher taxes.

Now, this did not really impact retail price of petrol and diesel but it did deny consumers the benefit of lower crude prices, which should have legitimately gone to them. Currently, peak prices of petrol are closer to Rs.90/litre while that of diesel is close to Rs.80/litre. That was the price even when crude was at $120/bbl in 2012. That is the story.

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