With the global crude oil prices regaining lost ground and demand reviving in the Indian economy, oil retailers are passing on the impact of last month’s excise duty hike on consumers. This is evident from the price rises that are being witnessed over the past several days now.

Petrol price on Monday was hiked by 48 paise per litre and diesel by 23 paise a litre as oil companies for the ninth day in a row adjusted retail rates in line with costs since ending an 82-day hiatus in rate revision.

Rates have been increased across the country and vary from state to state depending on the incidence of local sales tax or VAT. This is the ninth daily increase in rates in a row since oil companies on June 7 restarted revising prices in line with costs, after ending an 82-day hiatus.

The price rise has been so steep and continuous that the nine hikes that have happened over the days have taken petrol price up by Rs 5 per litre and diesel by Rs 4.87 a litre.

The fuel prices are now at a four-and-a-half month high in India even as crude oil rates have slumped below the $40 a barrel mark. Does this imply that a common man is being pushed to the wall and the central government is filling its empty coffers?

The answer unfortunately is a big yes. Last month, as India was battling the coronavirus pandemic in the third phase of the lockdown, a revenue-starved Central government hiked the excise duty by a record Rs 10 per litre on petrol and Rs 13 per litre on diesel. The hike effectively means that the Central government is collecting around 270 per cent taxes on the base price of petrol and 256 per cent in the case of diesel.

As per the government notification issued, of the Rs 10 per litre increase in duty on petrol, Rs 8 will be road and infrastructure cess, while Rs 2 will account for special additional excise duty.

Similarly, for Rs 13 per litre duty increase in diesel, Rs 8 will be road and infrastructure cess, while Rs 5 will account for special additional excise duty.

However, with barely any economic activity and near to nil demand for fuels due to lockdown, the impact of the hike was not passed on to consumers that time as crude oil prices were at record low levels.

The oil PSUs Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) instead of passing on the excise duty hikes to customers adjusted them against the fall in the retail rates that was warranted because of fall in international oil prices.

This simply means that when the consumer should have witnessed a fall in prices it was not offered to him and now that the oil companies want to cut down on loses, the consumers are made to pay for it under the guise of raised excise duty.

This move will impact a common man’s budget severely given the fact that no trading activity has been recorded in many places like that of Jammu and Kashmir. The government needs to step in these hard times and stop the common man getting impacted by the fuel price rise.