Bhubaneswar: Along with petrol, diesel prices in the country has risen for the sixth time in December. However, if the count is done since November, it's the 15th straight hike for the fossil fuels. The rise is attributed to upward movement of crude oil (Indian Basket), which on Dec 8 stood at $48.52 from $48.3 per barrel on December 1. In tandem with the rise per barrel, the exchange rate of Indian rupee vis-a-vis a dollar weakened to Rs 73.77 from Rs 73.51 on December 1. These two developments are jacking up the oil prices in the country.
This jacking up shoots up the diesel prices in Odisha to Rs 80.46 on Tuesday, which incidentally is 4th highest in the country. Though petrol prices have touched around Rs 84.34/litre, it's the high speed diesel that is all set to hit the common men hard in the State. Because, diesel prices will push up the already higher inflation rate - from vegetable to cereals and pulses to oil - in the State.
"Brinjals are prices are quoted between Rs40-50/kilo. The prices of sunflower oil has also risen. A kilo dal now cost Rs 110-120/kilo. The inflation is very. Prices have risen in all commodities across the spectrum. Prices of Atta, Sooji have risen by around Rs 2/kilo. It's hard for a lower middle class family to take nutritious food," said Subhas Garabadu, a resident of Old town.
Significantly, even retail traders have started complaining about how the margin spread over each commodities have become very thin. "The margin spread per kilo in dal and other essential commodities like rice, Atta, sooji has shrunk to Rs 1-2/kilo, claimed Prakash Sahoo, a grocery shop owner in Bhubaneswar, Unit-1 market.
Statistics also support the common men's cry on the streets. As per the latest CPI (consumer price index) for the month of October released by the Ministry of Statistics and Programme Implementation (Mospi) recently, Odisha has the 5th highest (among major states) inflation rate in India. The list of states is led by Kerala.
Why The Fuel Prices Remain So High?
The double taxation on these fossil fuels are responsible for unnatural higher retail prices of both petrol and diesel. While Centre collects Rs 31.83/litre as excise duty, Odisha levies VAT and counts another Rs 16/litre. Odisha levies 26 per cent VAT on diesel, which is second highest after Telangana (27 per cent).
For the Odisha Finance Department, VAT from petroleum products are cash cow. Because, in east India, Odisha has the 2nd highest diesel consumption. The consumption in 2019-20 stood at over six thousand metric tonnes. It is well known that the VAT revenue from these fossils fuels constitute a significant pie of 16.5 per cent of the State's own tax revenue.
"Since the State is already facing revenue crunch due to COVID-19 induced slowdown, the hands of the State government are tied down. We cannot sacrifice our revenue from petroleum oil products," said a senior joint secretary level officer in the State Finance department.
Flare Up In Oil Prices Likely In Dec?
December to bring more 'crude' oil anxieties. As experts are of the view that since oil market is expecting COVID-19 vaccine launch by December end or January next, the crude oil prices are set to become firm in the days to come. And the ball of lowering taxes will be then roll in the government's court.