India / Taxes on petrol, diesel funded COVID-19 vaccines, free meals: Puri

New Delhi: Union petroleum minister Hardeep Singh Puri on Friday commented on the record high petroleum and diesel prices and said that such levies helped fund the government schemes to provide free Covid-19 vaccines, meals to the impoverished and cooking gas to millions of people across the country.

He says cutting taxes is akin to ‘axing one’s own feet’ as the taxes fund developmental projects across the country like building roads, constructing houses for the poor and other social welfare schemes.

“I think this simplistic political narrative we get in India (that), 'Prices have gone up, why don't you reduce your taxes’. So every time the price goes up due to something else, it says you axe your own feet in the process,” Puri was quoted as saying by news agency PTI.

Puri also outlined that the domestic rates are linked to international oil prices which are also rising owing to various factors which also need to be understood.

“We completed vaccinating one billion citizens against Covid-19. We fed 90 crore people for one full year during the Covid-19 pandemic. Under the Ujjwala scheme, we provided free cooking gas LPG refill to 8 crore poor beneficiaries. We did all this and much more with that ₹32 a litre excise duty,” Puri said.

On questions whether the government would reduce taxes which make up 54% of the petrol prices and 48% of the diesel prices to reduce the burden on customers, Puri said that he is not the right person to answer since he is not the finance minister.

“I am not the finance minister therefore it is not an appropriate answer for me to give. That ₹32 a litre that we collect provides us with the ability to provide all these welfare services, including 1 billion vaccines,” he said.

The recent record spike in petrol prices across the country upset customers with many hoping for some relief amid the festive season. The prices have surged past ₹100 in almost all major cities. The rise in prices increased concerns regarding inflation as diesel is the mainstay fuel used for transporting goods like agricultural products.

The opposition parties including Congress have sharply criticised the government over the fuel price hike and sought a reduction in taxes.

“While the Centre levies specific excise duty on petrol and diesel, which does not change if the oil prices fall to $19 per barrel or rise to $84, state governments levy ad valorem rate of VAT whose incidence goes up with every hike,” he said.

Puri further added that petrol prices were decontrolled in 2010 effectively linking it to world markets while diesel prices were freed from government controls by the BJP government in October 2014.

He also referred to the ₹1.34 lakh crore oil bonds the previous Congress-led UPA government had issued but did not link them to the current fuel prices. These bonds have been highlighted by BJP leaders as a reason behind rising prices.