Global crude oil prices continue to slide and this could mean another cut in your fuel bills. Petrol is cheaper by Rs 12 a litre since June, while diesel prices have come down by Rs 8.5 a litre after the government lifted state controls and deregulated diesel prices in October.
The price cuts could have been higher, but for the government’s decision to hike excise duty on the fuels thrice since November.
These duty hikes will fetch the Centre additional revenue of Rs 23,000 crore to plug the budget deficit and fund its highway-building programme.
Minus these three duty hikes, petrol would have been cheaper by another Rs 5-6 a litre and diesel by another Rs 4-5 a litre.
That hasn’t happened because the duty hikes has been set off against the cut in rates that followed a drop in world oil prices.
Both the Centre and state governments have been reaping gains from the oil sector and the recent fall in global oil prices have only added to those gains.
A senior oil company official said the gains made by fuel retailers, including IOC, HPCL and BPCL from the fall in global rates could have been passed on to consumers after the decontrol of petrol and diesel prices.
But the government was “bound to take the benefit of this fall in oil prices to correct its fiscal imbalances” given the constraints of higher fuel subsidy bill and fiscal deficit position, he added.
Crude oil prices have fallen more than 50% since June 2014.
“If the exchequer has mopped up resources, it was done without putting any burden on the consumers … these resources will be used to meet budget deficit and fund welfare schemes,” petroleum minister Dharmendra Pradhan said after the second hike in excise duty on auto fuels.
The Opposition has slammed the government for the successive duty hikes instead of passing benefits of lower crude prices to consumers.