You have deregulated petrol price, but you have not delinked the taxes on it

Petrol price in Delhi is Rs 63.37 per litre and Rs 68.33 in Mumbai, with prevalence of varied prices in various states, in accordance with differences in levy of transportation charges, additional sales tax etc.

When the petrol price per litre in Chennai was Rs 51.90, the break-up of cost was calculated by the government as follows:
• Basic Price = Rs 21.93
• Excise duty = Rs 14.35
• Education Tax = Rs 0.43
• Dealer commission = Rs 1.05
• VAT = Rs 5.5
• Crude Oil Custom duty = Rs 1.1
• Petrol Custom = Rs 1.54
• Transportation Charge = Rs 6.00
• Total price = Rs 51.90

In other states there are levies like additional sales tax which was given up by Kerala Government in respect of the latest hike of Rs five per litre.
In a nutshell, one can surmise that the price the people pay is more than double the basic price of the fuel.

The government has simply washed its hands off by saying that the petroleum companies are deciding the price rate in accordance with the fluctuations in price in the international market.

But the basic fact is, when you deregulate the economy, the market and the price phenomenon, you cannot mix administered price system with the deregulated thing. At least you don’t say that you have deregulated it.

You are simply shirking responsibility with regard to economic management by cornering whatever you can from the people. You should be either cold-blooded or warm-blooded.

Therefore, it is high time the government bestowed its attention on reforming the arrogant form of levy of various taxes on petrol or other fuels simply stating that you have deregulated the system.

This is another paradox in India whose rulers, whoever they are, are waxing eloquent on free market economy on the one hand and at the same time refusing to bring in comprehensive welfare measures like the same obtaining in capitalistic countries.