Controversies refuse the leave the petrol price hike issue. The latest one concerns who will pocket the gains made on June 2 when, for one day, petrol consumers were charged an increased excise duty that the government later clarified was meant to be price-neutral.
The government had announced an increase in excise duty on petrol from 20 per cent to 35 per cent in the 1998-98 budget. However, the next day it reduced the basic price of petrol, rolled back the excise hike to 32 per cent, and announced that the price hike was not to be passed on to the consumer.
On June 2, the day between the announcement of the excise hike and its subsequent rollback, complete confusion prevailed at retail outlets. Petrol pump owners paid to oil companies and charged from consumers the increased duty. The bonanza reaped by the government on June 2 has now become a bone of contention among four claimants. The claimants are the National Highway Authority of India that looks after the highway development fund; the revenue department of the finance ministry that collects the excise duty; Oil Coordination Committee (OCC) that maintains the oil pool account; and lastly, the consumer who was made to pay extra for no fault of his.
The main tussle, however, is between the National Highways Authority of India and the revenue department. The highway authority has the support of finance minister Yashwant Sinha who has announced from various fora that this money should rightly go the authority for utilisation in road development. The revenue department, too, does not want to let go of the sum, however small it might be. The department points out that as per law, all excise collections should go to central revenue. The law, according to the department, makes it abundantly clear that all changes on account of revision of excise duty should be made in central revenue only.
While the OCC has also formally staked its claim, it has no case whatsoever. Rules governing the oil pool account make it clear that the changes in the basic price of petroleum products will be reflected in the oil pool account, any revision in the excise duty will go to Central revenue.
The last possibility of the revenue collection being refunded to the consumer is being totally ruled out. This is primarily because of a large number of petrol outlets in the country, estimated at around 17,000, that sold petrol to consumers that day. While it might still be possible to find out how much extra excise was paid by each petrol pump on that day, it is well nigh impossible to locate the individual customers who bought petrol on June 2.
The customer identification and verification become all the more difficult since most of the consumers in the country do not insist on cash receipts for the petrol they buy. Moreover, because of the price confusion on June 2, most of the retail outlet operators had refused to give receipts for the fear of charging a wrong sum from the consumer.
While various estimates are being made on the extra excise collected on June 2 because of the higher excise duty, most of these range between Rs 6 crore and Rs 8 crore. OCC officials say it is difficult to hazard a guess on it since, as a practice, the offtake of stock by petrol pump operators is small during the first half of the month and picks up during the later half. This is so since all the oil companies have monthly sales targets. Therefore, most of the oil companies start making efforts for higher sales only during the last few days of the month.
