Petrol prices spell windfall for govt

Cashing in: Against the claim that oil firms and the government were sharing the burden, the income generated tells a different story

NEW DELHI: At a time when the government is arguing that " under-recoveries" for oil companies is forcing upward revision in petrol prices, its own coffers have seen windfall gains from taxes on high prices. Indirect taxes on petroleum fetched the exchequer Rs 1 lakh crore in 2010-11, a jump of 43% or over Rs 30,000 crore from the previous year.

That's not all. The government's earnings from dividends and royalty payouts as well as profit petroleum from private oil contractors was a sizeable Rs 20,000 crore in the fiscal ending March 31, 2011.

After the last hike on November 3, 2011, the petroleum ministry had said, "It is entirely misleading to calculate profit of oil companies based on the quotes of international crude and product prices of a few days." It also pointed out that the companies were expected to lose Rs 1,32,000 crore during the current financial year, or 26% of India's oil import bill.