Finance Minister Arun Jaitley must also recover loans given to companies “and not burden the people by adding taxes on the retail prices of petrol and diesel”, an editorial in CPI-M journal “People’s Democracy” said.
The Communist Party of India-Marxist pointed out that in January alone, there had been three rounds of increase in excise duties by the central government on petrol and diesel.
These amounted to Rs.2.12 per litre of petrol and Rs.5.5 per litre of diesel. There had been nine hikes in excise duties since November 2014, as a result of which the total excise duty of petrol went up by Rs.11.77 and diesel by Rs.13.37 per litre respectively.
“These hikes have come in the background of the big drop in the international oil prices,” it said.
“Since India imports 80 percent of its fuel requirements, this should have resulted in a big decrease in the retail prices of petrol and diesel for the Indian consumers. But this has not happened. The Indian retail prices are double the global price of oil.
“The reason for this is that the (Narendra) Modi government has appropriated most of the fall in oil prices through increase in excise duties without passing on the benefit to consumers…
“There have been only small cuts in the retail price of petrol and diesel since the global oil prices have declined.”
The CPI-M pointed out that after the government removed administered prices for petroleum products, the retail price was supposed to reflect the market price.
But by administering hikes in excise duties, the steep fall in oil prices have benefited the oil companies both in the public and private sector.
It said that if the retail prices of petrol and diesel had fallen in tune with the global prices, it would have helped dampen inflation and price rise.
“Instead of passing off the benefits to the common people, the government has now sought to increase its revenue through taxation to bridge the budgetary deficit,” it said.
“The iniquitous burden of taxation can be seen by the fact that out of the price of one litre of petrol, 57 percent comprises taxes by the government. For diesel, 55 percent of the retail price is tax.”