A lot of things seem to be soaring these days. Price of Bitcoin, excitement regarding startup IPOs, and not to forget the fuel prices.⛽
Fuel prices have been soaring at a meteoric rate for quite some time now. So is the controversy surrounding it.
Wondering what’s it all about?
Well, then sit back and let us take you for a ride (The virtual one, can’t really afford the real one)🚗
I want to take you higher ft. Fuel prices ⛽💰
Why this hike?
Prices of petrol and diesel have been on a constant rise since last year and the spike became significantly steep from the first week of May 2021.
The price of petrol is over INR 100/L in all four metropolitan cities of the country. Diesel is not far behind either with prices touching INR 90/L💸
The reason behind the sky-rocketing price of fuels is two-prong,
- The first is Taxes. Central government imposes a flat excise duty and cess on fuel, while state governments further levy VAT. VAT varies from state to state. Hence, the different fuel prices across states.
Trivia time: Madhya Pradesh levies the highest VAT for petrol while Rajasthan does the same for Diesel.
The long weekend road trip isn’t so appealing now, is it?🧭
The taxes imposed by the Centre and the State governments account for more than 50% of the end selling price of both petrol and diesel.
- The second reason is the sharp rise in the price of crude oil internationally since the beginning of this year
How has the Government responded?
Last year, containing the pandemic spread was the priority, and development had to be put on the backburner.
The Government has said that a major chunk of the taxes has been utilised towards providing relief schemes to the poor. Carrying out developmental activities is a close second.
Next, the cess is also being utilised to fund the free vaccination drive across the country. The government has assured that the money of the taxpayers is being used to provide for the poor as well as to bring the economy back on its feet.
What does this hike mean?
The surge in fuel price has not been kind to the common people. Industries like logistics, e-commerce, food delivery & cab services are the ones that are facing the direct brunt of this price hike.
Other sectors are also suffering as the high fuel price is pushing the economy towards inflation.
The chances of fuel prices coming down appear to be grim in the near future. Both the centre and state governments are facing a resource crunch amidst the pandemic. Both centre and the state expect the other party to reduce their respective tax on fuel. However, both of them are reluctant to do so owing to their need for resources in these unprecedented times.
So how is the fuel price hike treating you? Tell us in the comments below.
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🤔 Wondering what happened to those goofy, odd & bizarre tax quotes? With the tax season knocking at the door, we thought, let’s talk taxes. 😉