Union Budget 2019-20: Odisha's diesel price 2nd highest in country!

Bhubaneswar: With the Union Budget 2019-20 deciding to milk the fossil fuel prices to garner revenue, the diesel cost in Odisha now has become the 2nd most expensive after Telangana in the country. And the State looks to be one among the hardest hit as Odisha topped the eastern region in per capita diesel consumption in the eastern region in 2017-18 financial year.

As of today, the diesel price in Odisha is the second costliest after Telangana in the country. The reason is Odisha Government levies the second highest VAT at the rate of 26 per cent on diesel in the country. Only Telangana with a VAT of 27 per cent is ahead of Odisha.

As per latest data available, with a levy of around 26-per cent of VAT on diesel, Odisha now earns around Rs 14.50/litre vis-a-vis around Rs 15.83/litre levied by the Centre on diesel.

The fuel economy reveals that when the diesel’s post-refining cost is pegged at Rs 38.54/litre, the levying of Central taxes (Rs 15.33/litre) and State VAT (Rs 14.78/litre) along with fuel dealers’ commission have together jacked up the cost to around Rs 71.65/litre today, which is now the 2nd highest in the country. The price in Malkangiri is higher than State average (shown in Pix).

According to a statistical deduction by Union Finance Ministry, the latest rise in diesel price will spike the inflation rate by mere 0.23 per cent. And as per Eco-Survey 2018-19, the CPI (consumer price index) in Odisha in 2018-19 has been below 4 per cent. Therefore, as per the Finance Ministry calculation, the fuelling of inflation in Odisha will not be burning the pocket of Aam Admi in any big way.

However, the significant fact is the per capita consumption of diesel in Odisha is the highest in the entire eastern India (Andaman & Nicobar, Bihar, Jharkhand, West Bengal and Odisha), though in absolute quantity consumption, Odisha comes second after West Bengal in eastern India. Odisha had consumed about 25.06 lakh metric tonnes in 2017-18. The per capita consumption in the State is 53 kg.

Interestingly, the lowest VAT rates of around 16.5 per cent on diesel are levied by States like UP, Punjab and Uttarakhand. Incidentally, all States have farm-based economy like Odisha.

The latest tweaking of fuel rates in the Union Budget has also affected the prices of  petrol. The price in Odisha today is Rs 72.38/litre. The price in Malkangiri is higher than State average (shown in Pix).

While the cost of petrol post refinery stage now is around Rs 33.91/litre, the dealers’ commission of around Rs 3.52/litre along with Central taxes worth Rs 19.98/litre and State VAT worth Rs 14.93/litre, the total then boils down to the price of  Rs 72.38/litre.

This shows taxes together account for 49 per cent of petrol cost, and when the State has a pie of 21 per cent of taxes collected on per litre of petrol, the Centre collects 28 per cent. Studies have revealed that hike in petrol price affects almost around 70 per cent of households, whose monthly budget saw an increase of nearly 20 per cent.

Interestingly, Odisha has the 2nd highest petrol consumption per capita after Andaman & Nicobar in eastern India. With around 15 kg, Odisha is behind A & N with 21kg. Petrol consumption in Odisha in 2017-18 was around 7.04 lakh metric tones.