₹19.98 per litre. This is now ₹32.98. Effectively, it took the gains from a lower base price as additional excise.At this point, the Centre needs all the revenues it can get.
The pandemic has dented all its revenue streams, while adding new expenditure and future liabilities. About 20% of the Centre’s tax revenues come from various taxes on fuel, with the big one being excise.States are in a similar situation.
In recent years, even states have earned 18-20% of their tax revenues from fuel products. Moreover, these revenues are outside the ambit of the Goods and Services Tax (GST), and don’t have to be shared with the Centre.This dual, and high, taxation makes fuel one of the most-heavily taxed items in the economy.