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A pinch here, a windfall there: Govt's fuel tax

A pinch here, a windfall there: Govt's fuel tax

Finance Minister Nirmala Sitharaman raised special additional excise duty and road and infrastrsucture cess - each one by Rs 1 per litre — on petrol and diesel in her maiden Budget on July 5. Prices at fuel stations rose by a higher degree, by Rs 2.5 and Rs 2.3 per litre, respectively, a day later. Retail prices are near their 2019 peak at the moment (Chart 1). The effective tax on petrol now stands at 105 per cent, or Rs 35.5 per litre, and excise duties contribute a healthy Rs 20 per litre (Chart 2). The tax on diesel is a bit lower at 67 per cent.   Download