Why are we paying high for Petrol and Diesel even if Crude Oil is selling below $30
While Crude Oil nosedived to $26.00, a level it hasn't seen since 2003, retail prices of Petrol and Diesel have not even dropped to Rs.50. I remember buying petrol for Rs.40 even in 2005. But what we are now paying is taxes on petrol and not for petrol. Over the years, excise duty and central & state taxes have been increased to Rs 30 per litre (it is calculated per litre and not percentage). So we are paying our dear government and not for oil.
The government has been struggling to control fiscal deficit, but tax collections aren't contributing much. So they started exploring avenues which can contribute on a regular basis. Nobody is going to touch this as it is quite sensitive. If the government starts about cutting the tax, then it cannot compensate the losses through any of the aveneues currently visible. So you and I have to pay little more for our fuel and i think as long we pay to the government, we can feel happy about it. Anyway, its coming back to us in some other form for sure.