Breaking Views: Raising Oil & Alcohol Prices a Short-Sighted Step?

In conversation with Amit Bhandari, author at Gateway House, to understand the consequences of such tax hikes.

Breaking Views
2 min read

Video Editor: Purnendu Pritam

Oil, alcohol, gold, and then cigarettes – four items where the government will charge heavy taxes. High oil prices will discourage FDI, will encourage illegal sales, adulteration, and smuggling. Is this sheer short-sightedness?

The Quint’s Editorial Director Sanjay Pugalia speaks with Amit Bhandari, author at Gateway House to understand the consequences of such tax hikes.

Amid the coronavirus lockdown, the government’s decision to raise excise duty levels on petrol and diesel by historic levels has taken up tax component on the retail price of auto fuels closer to 70 percent.


With the 4 May decision of the Delhi government to raise VAT on petrol and diesel to 30 percent of the price, the state tax rate on the two products has risen to Rs 16.44 and Rs 16.26 per litre, respectively.

Similarly, the Centre's decision on 5 May to raise excise duties on petrol and diesel by Rs 10 and Rs 13 per litre, respectively, has taken up the component of this tax on retail prices by Rs 32.98 on petrol and Rs 31.83 per litre on diesel, reported IANS.

As for alcohol, Delhi late on Wednesday imposed a whopping 70 percent “special corona fee” to help garner some much-needed revenue amid the disruption caused by the pandemic and the lockdown.

Karnataka, following Delhi, on Wednesday raised taxes on liquor by a sharp 11 percent to shore up revenues which have declined in the aftermath of the lockdown, in place since 25 March to curb the spread of COVID-19.

Watch the video above to know more.

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