THE PANDEMIC HIT THE OIL PRICES TO RECORD LOW. DESPITE LOW DEMAND, THE PETROL & DIESEL PRICES REMAINED AT THEIR ASTRONOMICAL RATES IN INDIA. HERE'S HOW.
Petrol prices are something which have a direct impact on the disposable income of every class (in terms of wealth) irrespective of their nation. This is because in today's modernized world, petrol is an essential commodity required by every person with reasonable means of income.
So why in a country like India where 2.17 million people own cars (as in 2018), why are the petrol rates so high? There is one word to clear 50% of your doubts:
TAXES
The graph below shows how much % of taxes are paid in various nations around the world.
It means for every 100 rupees spent on petrol, 69 rupees goes to the government coffers.
Admittedly other nations like Italy & the UK have similarly higher taxes BUT they are upper middle income countries with developed economies & poverty rate far below that of India.
Apart from high tax rates, another reason is Cascading Taxes. Cascading taxes are taxes charged on each stage of production. So Indian buyers have to pay Special VAT on the VAT charged on petrol they will purchase! So in simpler terms, they pay taxes on taxes!
Sounds baffling right? But its true.
The Indian Government was smart enough to pass an amendment to the Finance Bill,2020, to raise the limit up to which the government can raise special excise duty on petrol and diesel to Rs 18 per litre and Rs 12, respectively. Despite the massive increment on fuel prices, this news was hardly covered by the Indian media. This shows how much the Modi Government can influence public opinion by controlling the media.
Last but not the least is the fact that Taxes are charged by both the state & the central government. Its the main reason why fuel prices are the lowest in union territories!
THATS ALL FOR YOU FOLKS. IF YOU HAVE ANY DOUBTS OR QUERIES, FEEL FREE TO COMMENT BELOW!
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