Udit Prasanna Mukherji, TNN | Sep 18, 2012, 07.34AM IST
KOLKATA: Don't be surprised
if diesel gets dearer again in October without any hike being announced by the
Centre and all other parameters — international price of crude oil,
rupee-dollar exchange rate or tax rates — remaining unchanged. Bengal and some
other states are enjoying an extra benefit in the form of a 20% surcharge on
sales tax that adds up to the Rs 50.61 price tag of diesel here.
Bengal earns Rs 1.62 per litre of diesel as
this irrecoverable surcharge, say finance departmentsources. This component alone
fetches the state government a monthly revenue of Rs 45 crore.
It's called an "irrecoverable"
surcharge because the state does not pass it on to oil companies. All these
years, the Centre used to pay this amount to oil companies because they
couldn't recover it from the states. On July 26, 2012, the Centre refused to
carry the burden any longer and allowed oil firms to recover a portion of it by
increasing prices. The recovery was capped at Rs 1.08 a litre for diesel. Now
that diesel prices have been increased by Rs 5, this component adds up to Rs
1.62 a litre in Bengal but because of the cap, oil companies can recover only
Rs 1.08. The remaining 54 paise goes to the Bengal government's coffers.
However, this 54 paise may well be passed on to you as the Centre proposes to
review the under-recovery every quarter.
Money-spinner
Diesel price: 50.61/lt (inclusive of central,
state taxes) Diesel sold in state/month 2.8 lakh kilo litre.
State earns
Rs 264.6 cr per month Sales tax at 17% is
6.83/litre Cess is 1/litre Irrecoverable Surcharge at 20% of sales tax is
1.62/litre Total: 9.45/litre.
Why price may rise again in October
Irrecoverable surcharge/lt charged by state
is 1.62 Earnings from irrecoverable surcharge per month is 45 cr Surcharge not
passed on to oil cos. Till July 2012, Centre compensated the oil companies From
Aug 2012, Centre says it won't share the burden, asks oil firms to recover a
portion of this component by increasing prices The cap for recovery fi xed at
1.08/lt for diesel 5/lt hike in diesel price takes surcharge to 1.62/lt, but
oil cos can recover only 1.08 Remaining 54p may be passed on to consumers from
Oct as Centre proposes to review under-recovery every quarter .
Ministers fume at tax-cut advice
This irrecoverable surcharge component
explains why fuel prices in Bengal are higher than some other states. Taking
the Rs 5 hike into account , the Mamata government earns an additional Rs
285.60 crore a year as sales tax, cess and irrecoverable surcharge taken
together . TheManmohan Singh government is urging state governments to give up
a part of this gain to lessen the burden on the consumer. An advertisement
issued by the ministry of petroleum and natural gas on Monday says: "The
recent increase in diesel price will yield an additional tax revenue of Rs
8,200 crore per annum to the states. The states can, at least, forego this
additional revenue to provide additional comfort to the common man."
The suggestion has drawn flak from Mamata
Banerjee's cabinet colleagues . "The state government has meagre resource
avenues, unlike the Centre. Now if the Centre starts dictating ways to the
state government then there is no point calling this a democratic set-up
," said panchayat minister Subrata Mukherjee. Transport minister Madan
Mitra reacted more aggressively: "Who are they (Centre) to suggest what
state governments should do? They should have issued a notification instead of
giving a suggestion through advertisement . Our government swears by ma mati
manush, and our leader and chief minister will take the call on this."
Though the Opposition in Bengal is at
loggerheads with the Manmohan Singh government as well, Left Front chairman
Biman Bose came out with a similar suggestion for the Mamata Banerjee
administration . Bose pointed out that the Left Front government had slashed
sales tax on diesel price in 2008-09 to give relief to the common man and urged
Mamata to do the same "if she was sincere to the cause of the masses"
.
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