“Increase Of Fuel Prices Through Taxes Is Extortion”: P Chidambaram To NDTV

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Former Finance Minister P Chidambaram on rising fuel prices

New Delhi:

The increase of petrol and diesel prices by way of taxes imposed by the central government is extortion for consumers, P Chidambaram, Former Finance Minister told NDTV. ”One third of the price of petrol that consumers pay is a tax to the central government, so, a 33 per cent taxation on any commodity is extortion,” said Mr Chidambaram on rising fuel prices in an exclusive interview to NDTV.

Giving a break-up of fuel prices, Mr Chidambaram explained that if a consumer pays Rs 102 per litre for petrol, then Rs 42 goes to the oil companies companies (OMCs) – which includes processing of crude oil into fuel, Rs 33 goes to the central government as tax, Rs 24 goes to the state government, and Rs 4 to the dealers. ”Rs 33 out of Rs 102 is almost 33 per cent. This, according to me, is extortion,” said the former finance minister. 

The comments from the top politician comes at a time when petrol and diesel prices have been on rising spree in India, driven by a surge in global crude oil rates. Globally, oil prices jumped to a three-year high above $85 a barrel today, on forecasts of a supply deficit over the next few months, due to rising demand due to the easing of travel restrictions, according to news agency Reuters.

Brent crude futures were last up 77 cents, or 0.9 per cent, at $84.77 a barrel and U.S. West Texas Intermediate (WTI) crude futures rose 87 cents, or 1.1 per cent, to $82.19 a barrel. The contract is now heading for a 3.5 per cent gain on the week, up for the eighth consecutive week.

Back home, petrol and diesel prices continued to rise on Friday, October 15, following a surge in global crude oil rates. In the national capital, petrol and diesel rates jumped 35 paise to cost Rs 105.14 and diesel is being sold at Rs 93.87 per litre respectively, according to Indian Oil Corporation.



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