33% tax on fuel is 'extortion' : Chidambaram
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The incredible increase in taxation on fuel prices is nothing more than 'extortion' of the common man said former Finance Minister P Chidambaram. "One third of the price of petrol that consumers pay is a tax to the central government, so, a 33 per cent taxation on any commodity is extortion,'' said Mr Chidambaram on rising fuel prices in an interview to NDTV.
Petrol and diesel prices have crossed the ₹100 mark in major metros in India and global fuel prices have surged to above $85 a barrel in a three year high. The shortage is due to greater demand after bans on travel were relaxed in many countries leading to forecasts of a deficit in the next three months.
Giving a break-up of fuel prices, Mr Chidambaram explained that if a consumer pays Rs 102 per litre for petrol, then ₹ 42 goes to the oil companies companies (OMCs) - which includes processing of crude oil into fuel, ₹ 33 goes to the central government as tax, ₹ 24 goes to the state government, and ₹ 4 to the dealers.
On Friday, petrol prices rose another 35c to ₹105.14 while diesel rose to ₹93.87 in the national capital.