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Petrol, Diesel Subsidies Three Times Higher than E-Vehicle Budget: Study

The cuts to fuel excise and oil company margins announced late last year resulted in a major drop in government revenue

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Despite the commitment to reduce air pollution and achieve at least 30 per cent of new vehicle sales being electric by 2030, the Indian government subsidised conventional transport by Rs 26,957 crore over the last nine months, far outpacing the Rs 10,000 crore spending over three years. Pixabay

India’s subsidies to petrol and diesel between October 2018 and June 2019 amounted to almost three times the three-year government budget for electric vehicle (EV) support, a new study revealed on Thursday.

The study by Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) said the government could redirect the money collected in tax via petrol and diesel towards EVs and see far more growth.

Despite the commitment to reduce air pollution and achieve at least 30 per cent of new vehicle sales being electric by 2030, the Indian government subsidised conventional transport by Rs 26,957 crore over the last nine months, far outpacing the Rs 10,000 crore spending over three years on its flagship EV program and faster adoption and manufacturing of electric vehicles.

“The cuts to fuel excise and oil company margins announced late last year resulted in a major drop in government revenue. The money would have been better spent in supporting India’s ambitious agenda to adopt EVs and renewable energy rather than perpetuating dependence on petrol and diesel,” IISD Associate Tara Laan said in a statement.

Petrol, Diesel, Subsidies
India’s subsidies to petrol and diesel between October 2018 and June 2019 amounted to almost three times the three-year government budget for electric vehicle (EV) support. Pixabay

India is heavily reliant on fossil fuels in the transport sector, which contributes to greenhouse gas emissions and alarming levels of air pollution.

Transitioning to EVs could reduce the level of toxic air pollutants relative to conventional vehicles and shift the source of these emissions away from cities.

“With the decision to reinstate the fuel excise and further lower GST on EVs, the government is back on the right track,” said Purva Jain, GSI India Program Consultant and co-author of the report.

“It should also allocate some of the fuel excise and road and infrastructure cess to boost support to EVs,” said Jain.

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This would help in reducing dependence on imported crude oil and improve air quality.

“Price cuts for petrol and diesel have the opposite effect, sending motorists a price signal to continue using fuel and, more importantly, a message that the government intends to intervene when international oil prices escalate.”

A main recommendation of the study is to reallocate subsidies for oil and fuel to programs that support India’s clean energy transition, including implementing additional policies that would support the EV market.

Petrol, Diesel, Subsidies
The study by Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) said the government could redirect the money collected in tax via petrol and diesel towards EVs and see far more growth. Pixabay

“We recommend that government implements pricing policies that promote EV charging during times when renewable electricity is being generated,” said Laan.

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“In addition, electricity distribution companies need to be supported in strengthening the grid to accommodate a growing supply of renewable sources and growing demand from EVs.” (IANS)

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Petrol Prices On The Reverse Trend For The Last 13 Days: Prices Fall

Both in Delhi and Kolkata, diesel prices in the fortnight have declined

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Petrol Prices On The Reverse Trend For The Last 13 Days: Prices Falls
Petrol Prices On The Reverse Trend For The Last 13 Days: Prices Falls, flickr

Domestic petrol prices, which had hit record levels for 16 consecutive days in May, have been on the reverse trend for the last 13 days, including Monday, but the relief for consumers has been slow in coming.

The pace of decline has been less than half the rate of surge.

Percentage-wise, since May 30, when prices started to take a downturn, petrol prices have slipped 2.35 per cent in Delhi, compared to the 5.5 per cent in the previous 16 days.

In absolute terms, prices have gone down by Rs 1.85 a litre since May 30, compared to the increase of Rs 3.8 per litre in the during May 14-29. On Monday, fuel was sold at Rs 76.58 per litre in the national capital, down 20 paise from Sunday’s level, the IndianOil Corp’s website showed.

In Mumbai, where petrol prices were the highest in the country last month, the decline has been much slow at Rs 1.23 per litre so far, against the rise of Rs 3.76 a litre during May 14-29.

On Monday, petrol price in Mumbai was Rs 84.41 per litre against Rs 84.61 on Sunday. Similarly, in Kolkata and Chennai, the fuel was sold at Rs 79.25 and Rs 79.48 respectively.

In Kolkata and Chennai too, the decline has been Rs 1.81 and Rs 1.65 per litre in the last 13 days, around 50 per cent of the previous rate of increase.

In tandem with petrol prices, diesel too has seen a decline, but of only around 2 per cent in all the major cities including Delhi, compared to over 5 per cent rise in the previous fortnight.

Petrol station
Petrol station, flickr

Both in Delhi and Kolkata, diesel prices in the last 13 days have declined by Rs 1.36, and in Mumbai and Kolkata, the fall was of Rs 1.44 and Rs 1.45 per litre respectively.

Also read: Petrol price slashes by 32 paise and diesel price by 85 paise

On Monday, prices of the fuel in Delhi, Kolkata, Mumbai and Chennai were at Rs 67.95, Rs 70.50, Rs 72.35 and Rs 71.73 per litre, respectively. (IANS)