Fuel prices on fire: Centre earned Rs 3.89 lakh crore from taxes on petrol and diesel in last fiscal year

New Delhi: If the claims of BJP's IT Cell chief Amit Malviya are to be believed, it's the 'mismanagement' of the UPA government regime that is responsible for the increased prices of petrol and diesel as the present government led by Prime Minister Narendra Modi is paying for the oil bonds which were issued to finance the subsidy given on some petroleum products to cover the difference between the purchase price by the oil marketing companies (OMCs) and the reduced price they were forced to sell by the then UPA government.

Malviya, in his tweet, also claimed that the redemption of oil bonds, which started in the financial year 2021, would continue till 2026.

In contrary to the claims of ex-banker Malviya, the BJP-led government has already recovered three times the amount it has to pay on the entire oil bond by increasing excise duty on petrol and diesel in the last one year as Centre has earned Rs 3.89 lakh crore.

According to the government data, which is analysed by Millennium Post, the Centre earned Rs 2.36 lakh crore in 2014-15 from taxes, including VAT, on petrol and diesel, which rose to Rs 4.23 lakh crore in 2019-20 and it increased further to Rs 5.25 lakh crore in the financial year 2020-21, when the sale of the liquid fuel was proportionally down.

In comparison to earnings from taxes on petrol and diesel, as per sources, the Centre has to pay over Rs 1.30 lakh crore to OMCs till 2026 as the redemption of oil bonds, which is dubbed as a burden of the previous UPA government. As per the data, the earnings from the taxes on petrol and diesel are much more than what the government is claiming to pay OMCs.

According to the data, the sale of petrol was reduced by 20.24 lakh MT in 2020-2021 as in the year 2019-2020, total 2.99 crore MT petrol was sold which reduced to 2.79 crore MT in the year 2020-2021. Similarly, the sale of diesel reduced by 98.8 lakh MT in 2020-2021 as the total diesel sold in 2019-2020 was 8.26 crore MT and it reduced to 7.27 crore MT in 2020-2021.

Interestingly, the collection from income tax has not increased in proportional to the taxes on petrol and diesel. In 2014-15, total Rs 2.58 lakh crore was collected from income tax, which increased to Rs 4.80 lakh crore in 2019-20 and Rs 4.69 lakh crore in 2020-2021.

Notably, Centre collects excise tax on fuel prices, while VAT on petrol and diesel is collected by the states.