Mumbai: Despite the government saving Rs 60,000 to Rs 70,000 crore because of falling crude import prices, the consumer has not benefited by even 12 per cent.
Consumers still pay 10 per cent excise and two per cent surcharge. Airline passengers are also being fleeced because aviation fuel (ATF) prices are down 50 per cent but passenger fares have not come down to that extent and in fact have even gone up.
These were some of the observations made by an expert panel on oil on the crude market outlook here on Wednesday. So where has this Rs 60,000 crore gone?
A senior trader from the industry said India could have deployed these funds in port development and regulated air fares. The tax component on ATF is 40 per cent. Crude has come down from $100 to $30-40 but the transmission is not happening.
The government is cross-subsidising the under- recoveries and the procedure is vague so the consumer will never benefit, the trader explained.
The government said it would use the Rs 60,000 crore for a power development fund for developing alternative energy sources and Rs 20,000 crore for road development, but there is no account of this. He said India could become a refining hub as the cost of production is $1.5 cheaper compared to that of global players.
Mr Sukrit Vijaykar, founder, Trifecta Consultants, said the big word is “speculation.” When in December, Opec voted to maintain production at current levels it led to panic selling in the futures market.
Mr G. Chandrashekar, director, IMC, said oil prices would continue at $40-50 for the next two to three years....