Fuel hike: Petrol, diesel prices on fire, touch record highs

NEW DELHI: Fuel prices hit yet another high as a litre of petrol cost almost Rs 80 in the national capital of Delhi on Friday. Petrol inched up to Rs 79.99 per litre in the capital while in Mumbai it now costs Rs 87.39.Diesel prices too were on the boil with the fuel costing Rs 72.07 in Delhi and Rs 76.51 in Mumbai.The rupee on the other hand, breached the crucial 72 mark against the US dollar for the first time on Thursday.Finance minister Arun Jaitley on Wednesday said there's nothing to worry because the reasons are global. However, what goes without a mention is that the impact is totally domestic, with the consumer paying more every day.The government meanwhile, earns more and more every day from the rising fuel prices.Most fuel taxes are a percentage of the price (ad valorem) which means government's tax earning goes up as price increases. So, even if your fuel consumption is the same as a year ago, you are paying more to the government because the price of the fuel has gone up.Centre raised excise duty nine times between November 2014 and January 2016, while it cut the tax just once in October last year.The result is, the centre would have earned over Rs 10 lakh crore from taxes on petrol and diesel between 2014-15 and 2018-19. Its earnings will go up from Rs 1.05 lakh crore in 2014-15 to Rs 2.57 lakh crore in 2018-19.Taxes account for half of the price we pay for petrol and diesel and there's scope for relief. Also, India's petrol price as a percentage of daily per capita GDP is highest in the world.The bottomline thus is that the centre doesn't have to take a hit on revenue, it just has to be okay with not earning more with every hike.