The Polit Bureau of the CPI(M) expresses its strong opposition to the Modi government’s decision to increase excise duty on petrol and diesel. There has been a steep hike of Rs. 1.50 per litre.

Petrol and diesel are already heavily taxed and this constitutes a major part of the retail price. Therefore, there is no justification for this tax hike.

The government is misleadingly stating that this hike will not result in an increase in the retail price of petrol and diesel. However, what it actually does is to prevent a further reduction in the retail price which is due. This amount is being mopped up to augment government revenue to the tune of Rs. 6,000 crore in the current financial year. Not only the people have been deprived of a substantial reduction in petrol and diesel prices, but in future when international oil prices rise, the tax burden on the people will increase.

There is a need for an immediate review and revision of the tax structure on petroleum products. The iniquitous ad valorem tax should be given up and a more rational tax structure instituted.