From Vivek Kaul’s Diary (IND) –
The Narendra Modi government has increased the excise duty on petrol and diesel nine times since November 2014.
This has ensured that the benefit of falling oil prices has not been totally passed on to end consumers in the form of lower petrol and diesel prices. What has not helped is that the state governments have also increased their share of taxes on petrol and diesel and ensured that the benefits of lower oil prices have not been totally passed on to the citizens of this country.
A press release put out by the Bhartiya Janata Party in February 2016 said that all state governments except Mizoram, Assam, Tamil Nadu, Chhattisgarh and Gujarat, had increased the value added tax on petrol and diesel.
Hence, the increase in excise duty on petrol and diesel, is not the only reason for an increase in the price of petrol and diesel.
Having said that, what would have happened if the benefit of lower oil prices had been totally passed on to the end consumers in the form of lower petrol and diesel prices?