Former Financing Minister P Chidambaram on increasing fuel pricesNew Delhi: The increase of gas and diesel rates by method of taxes enforced by the main federal government is extortion for customers, P Chidambaram, Former Financing Minister informed TheIndianSubcontinent.
One third of the cost of petrol that consumers pay is a tax to the central federal government, so, a 33 per cent tax on any product is extortion, said Mr Chidambaram on increasing fuel rates in an unique interview to TheIndianSubcontinent.Giving a break-up of fuel prices, Mr Chidambaram discussed that if a customer pays Rs 102 per litre for fuel, then Rs 42 goes to the oil business companies (OMCs) - which includes processing of crude oil into fuel, Rs 33 goes to the central federal government as tax, Rs 24 goes to the state federal government, and Rs 4 to the dealers.
Rs 33 out of Rs 102 is almost 33 per cent.
This, according to me, is extortion, stated the previous finance minister.
The remarks from the leading politician comes at a time when petrol and diesel prices have been on rising spree in India, driven by a rise in international petroleum rates.
Globally, oil costs leapt to a three-year high above $85 a barrel today, on forecasts of a supply deficit over the next few months, due to rising demand due to the easing of travel restrictions, according to news firm Reuters.Back house, gas and diesel rates continued to increase on Friday, October 15, following a rise in global crude oil rates.
In the nationwide capital, petrol and diesel rates leapt 35 paise to cost Rs 105.14 and diesel is being cost Rs 93.87 per litre respectively, according to Indian Oil Corporation.Calling the PM Modi-led government as the greediest federal government that he has actually ever stumbled upon, Mr Chidambaram added that progressive taxes need to be increased and the Centre ought to stop relying on a single source of revenue to gather its expenditure.
Tax on fuel and diesel is regressive as the quantity of tax paid on fuel by a rich person and a poor person is the very same, declared Mr Chidambaram.State-run oil refiners in India such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum revise the fuel rates every day, by taking into consideration the petroleum prices in worldwide markets, and the rupee-dollar currency exchange rate.
Meanwhile, a sharp drop in oil stockpiles in the United States and the member countries of the Organisation of Economic Co-operation and Advancement is expected to keep the worldwide supply tight.
On Thursday, the International Energy Firm stated that the energy crunch is expected to improve oil demand by 500,000 barrels daily (bpd), according to Reuters.