The new export duty will not apply to supplies of petroleum products to Nepal, Bangladesh and Sri Lanka for the time being.
The central government has reduced the special excise duty applicable on petrol and diesel to put an end to the rumours of increase in prices and the alleged shortage of these two petroleum products. Along with this, it has abolished the concessions given on the export of various petroleum products to foreign countries and implemented the new export duty. The government has clarified that the new export duty will not be applicable on the supply of petroleum products to Nepal, Bangladesh and Sri Lanka for the time being; but no exemption will be given in the case of other countries.
The government claims that the above steps have been taken with the aim of providing relief to the common consumers and ensuring the availability of petroleum products in the country. It has also been expressed that despite the financial instability across the world, these steps will prove helpful in maintaining the current pace of national growth rate. It is worth mentioning that due to the war in West Asia, crude oil prices have been fluctuating for the last one month. These prices have been swinging between $70 per barrel and $122 per barrel. Three months ago, crude oil was at $45-50 per barrel. Then, when this price reached $70, many countries were struggling.
Now the average price is $98. Due to this, more than 85 countries in North America, South America, Asia, Europe and Africa have increased the retail prices of petrol and diesel by 22 to 48 percent. The Indian government has directed the three public sector oil companies to refrain from increasing the retail prices of petrol and diesel. Such orders cannot be applied to Reliance Petro or other companies in the private sector. According to media reports, some private sector companies have started closing their petrol/diesel stations, citing the unfortunate situation arising from the surge in international crude oil prices.
On the other hand, a company called Nayara Energy, which operates 6967 out of 1,02,075 petrol pumps (petro stations) in the country, has increased the price of petrol by Rs 5.30 and diesel by Rs 3 per liter. This has only strengthened the fears that government companies are also going to increase the rates. As a result, crowds of vehicles started gathering in front of filling stations in most states of the country. When consumers continued to show distrust towards the assurances and promises of Union Petroleum Minister Hardeep Singh Puri, Finance Minister Nirmala Sitharaman considered it justified to intervene.
Due to this intervention, the special excise duty on petrol has now been reduced from Rs 13 to Rs 3 per litre, while the same duty on diesel, which was Rs 10 per litre, has now been completely abolished. Mrs. Sitharaman claims that while the government's decision will provide some financial relief to public sector oil companies, there will be no new burden on the common consumer. Opponents of the Modi government are calling this government's 'generosity' a compulsion arising from the upcoming assembly elections in four states. Such thinking is not wrong in its place.
The common consumer understands the fact that India cannot protect itself from the increase in retail prices for long due to the huge jump in international prices of oil and gas. Despite this, it wants to avoid bearing the burden of increase in retail prices for as long as it can. Recognizing this mentality, the government chose the measure of reducing special excise duty. According to the statements of the Union Finance Minister, oil companies were suffering a loss of Rs 24 per liter on petrol and Rs 30 per liter on diesel.
The government considered it appropriate to reduce the special excise duty to protect their economy from weakening. As far as the private sector is concerned, the end of export-oriented concessions is a big blow for it. But the fact is that these companies earned huge profits during the last financial year through the process of buying Russian crude oil at cheap prices and refining it into high-speed diesel, aviation turbine fuel (ATF) and other petrochemicals on a large scale to European countries.
Now, with the slogan of increasing the availability of petroleum products in the country, if the government has slightly twisted the arms of these companies, then they should also demonstrate the mindset of prioritizing national interests. Overall, the steps taken by the central government are welcome. In view of these, it is also the duty of the common consumer to also demonstrate a sense of responsibility, avoid rumors and use petrol-diesel-gas economically.
