Govt rules out cut in excise duty on fuel price amid nationwide protests

Congress workers hold a refuelling machine in Bengaluru during the Bharat bandh Photo: PTI
As the Congress-led Opposition led a nationwide strike to protest the increase in petrol and diesel prices on Monday, and resolved to keep up the pressure on the government with more protests in the days to come, the Centre ruled out any cut in fuel prices.

If the Congress accused the Narendra Modi government of Rs 11 trillion "loot" of taxes collected from common people by keeping petrol and diesel prices high when international prices were low, a top government official said neither the Centre nor some states had the appetite to stomach revenue loss from a cut. 


The official said any cut in excise duty, which the central government levies, will impact fiscal deficit. The official, who did not wish to be identified, pointed out the examples of states such as Bihar, Kerala, and Punjab, which are not in a position to cut sales tax (or VAT). Kerala and Punjab have non-BJP governments, while Bihar has a Janata Dal (United)-BJP coalition. 

The official said the government anticipates that international oil prices, which together with a drop in the value of rupee, has been fuelling the fuel price rise to record levels, will moderate in coming days to take the pressure off. Prices in Delhi, where rates are the cheapest among all Metros and most state capitals because of lower VAT, saw petrol touch an all-time high of Rs 80.73 per litre Monday while diesel scaled to new high of Rs 72.83 a litre. The official said consumers will have to pay for the fuel they use. 

The BJP said only 16 parties, and not 21 as claimed by the Congress, participated in the bandh and their combined strength in the Lok Sabha was just 87 members. No Samajwadi Party and Bahujan Samaj Party members were present with the Congress chief at Rajghat, but they held protests in Uttar Pradesh. The Trinamool Congress and Aam Aadmi Party sent their representatives to Rajghat, but didn't support the bandh in West Bengal and Delhi. 

UPA Chairperson Sonia Gandhi, former Prime Minister Manmohan Singh, Nationalist Congress Party chief Sharad Pawar, Rashtriya Lok Dal's Jayant Chaudhary and others joined the protest in Delhi. Singh said the Modi government has done a lot which is not in interest of nation, and has crossed limits, Singh urged Opposition parties to shed their differences and unite to save democracy in country. Sonia Gandhi didn't speak, allowing Rahul Gandhi to take the centrestage. 

Industry associations said Karnataka lost Rs 40 billion due to Monday's strike, while informal estimates in Odisha said the loss could be up to Rs 15 billion.