Hyderabad: Rising petrol and diesel prices over the past few months are generating hundreds of crores every month for the state government’s coffers.
In Hyderabad, the fuel prices touched all-time high with petrol being sold at Rs 91.65 per litre and diesel Rs 85.50 on Friday.
The rising fuel prices have helped the government cover up the revenue losses incurred during the lockdown last yaer. Fuel sales took a severe beating in 2020-21 fiscal with no public transportation for the most part of 2020 and personal vehicles taken off roads from the third week of March to June.
Though lockdown restrictions were lifted gradually from July 1, fuel sales started picking up only since October, when all restrictions on travel and transportation were removed. The government lost nearly Rs 5,000 crore due to corona lockdown in 2020-21 fiscal till October.
However, revenue earnings through VAT (value added tax) on fuel witnessed a sharp rise from November. While increased consumption of fuel contributed to this growth, the rising fuel prices since November also made government richer.
The state government collects 35.20 per cent VAT (value added tax) on petrol and 27 per cent VAT on diesel, and is among the states collecting highest VAT on fuel in the country. The state government earns Rs 800 per crore per month on an average through VAT on petrol and diesel.
In 2019-20 fiscal, when there was no lockdown, the government earned Rs 7,720 crore through VAT on fuel till January 2020, as per data available with the commercial taxes department
In 2020-21, the government feared this would be halved due to the lockdown. Contrary to this, the revenue earnings witnessed a steep hike from November.
In 2020-21, the government mopped up Rs 6,736 crore through VAT on fuel till January 2021-end. This is a reduction of just Rs 984 crore, when compared with previous fiscal 2019-20. The government could bridge losses of corona lockdown with the help of rising fuel prices.
