Kamal Nath Blasts Centre's Fuel Tax: Rs 30/Litre Grab

Nath's calculation reveals that taxes constitute nearly 60% of the retail price of petrol and diesel, a burden that disproportionately hits the middle and lower classes. The Congress veteran demanded an immediate reduction in excise duty and VAT to ease household budgets. His statement aligns with opposition parties' coordinated push to make fuel pricing a central campaign issue.

The central government has collected over Rs 10 lakh crore in petroleum taxes since 2020, data from the Petroleum Planning and Analysis Cell shows. While global crude prices have moderated, retail rates remain stubbornly high due to unchanged tax structures. This fiscal strategy has generated record revenues but also fueled public discontent.

Analysts note that the tax-to-price ratio in India is among the highest globally, with no major reduction in sight. The political calculus is delicate: any cut would reduce fiscal space for welfare schemes, but maintaining status quo risks electoral backlash. Nath's attack strategically targets the government's most vulnerable economic flank.

Power Move: Expect opposition parties to weaponize fuel taxes in upcoming assembly polls, forcing the Centre into a defensive position. If global crude prices fall further, the government may face irresistible pressure to cut taxes—or risk losing the narrative on inflation.

This article was edited with AI assistance for readability. Read original here.