ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Taxes on Petro Products

Petro products are price-sensitive, as these constitute key inputs to private consumption, industrial production, and public transportation. Petro prices have global linkage and exhibit high volatility. A quantitative and historical analysis of taxes on petroleum products in India, which is largely import-dependent, is undertaken, as the tax component constitutes 40%–50% of the retail price. During 2015–16 and 2016–17, the government could have reduced tax rates on petrol and diesel, but it did not, probably because of the wider considerations of fiscal balance and development imperatives.

The Case of LPG

The use of liquefi ed petroleum gas as a clean cooking fuel increased dramatically between 2007-08 and 2009-10. Its use in rural areas is still confi ned to a minority, but this is changing rapidly. The situation now is very different from that portrayed in "Subsidies for Whom? The Case of LPG in India" (EPW, 3 November 2012), which used dated information from 2004-05 for its analysis.
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