Even as the State Government blames Centre over the fuel price flare-up, the usually hard-hit are the common people. And the diesel price in Odisha has now risen to fifth highest in the country, thanks to a high of around 25-per cent VAT levied on the fuel by the State Government in addition to the Central Excise levied by Centre.
No doubt, the diesel price rise would have a cascading effect on the economy and fuel the inflation higher in Odisha.
As per data available, with a levy of around 25-per cent of VAT on diesel, Odisha has become the fifth State that levied high taxes on the fuel. Odisha is behind Telangana (25.95%), Chhattisgarh (25.79%), Kerala (25.58%) and Gujarat (25.53%). Owing to the high taxation on diesel, Odisha now earns around Rs 14.50/litre vis-a-vis around Rs 15.33/litre levied by the Centre on diesel.
The fuel economy reveals that when the diesel’s post-refining cost is pegged at Rs 39.78/litre, the levying of Central taxes (Rs 15.33/litre) and State VAT (Rs 14.50/litre) along with fuel dealers’ commission have together jacked up the cost to around Rs 73.26/litre, which is now the 5th highest in the country.
Moreover, how hard-hitting it is on the citizenry could be gauged from the fact that 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. While West Bengal consumed around 2,798 thousand metric tonnes of diesel in 2017, Odisha had consumed about 2,703 thousand metric tonnes. The per capita consumption for the respective States then worked out at around 18kg and 29 kg.
Interestingly, when the VAT levied by West Bengal on diesel is around 17.58 per cent, it is around 25 per cent in Odisha. However, the lowest VAT rates of around 16.5% on diesel are levied by States like UP, Punjab and Uttarakhand. Incidentally, all States have farm-based economy like Odisha.
It’s not only diesel, the flare-up is also witnessed in petrol price that touched almost Rs 76/litre on Wednesday (May 23). While the cost of petrol post refinery stage now is around Rs 36.93/litre, the dealers’ commission of around Rs 3.62/litre along with Central taxes worth Rs 19.48/litre and State VAT worth Rs 14.74/litre together pushed the cost to Rs 75.98/litre. This shows taxes together account for 45 per cent of petrol cost, and when the State has a pie of 44 per cent of taxes collected on per litre of petrol, the Centre collects 56 per cent. Studies have revealed that the 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 8.3 kg, Odisha is behind A & N with 21kg. Even, West Bengal’s per capita onsumption is around 4.4kg only. Petrol consumption in Odisha in 2017 was around 597 thousand metric tonnes.