Rising fuel prices boost Karnataka coffers by Rs 2,000 crore
Increasing fuel prices have helped the state government earn additional revenue of nearly Rs 2,000 crore in the past four months, even though consumption has remained moderate. The government mopped up Rs 6,314 crore between September 2020 and mid-January 2021, Rs 1,896 crore more than the figure of the corresponding period in 2019-20. While daily consumption of petrol has reached pre-Covid levels of 20,000 kilolitres, that of diesel is only about 70 per cent of the average recorded before the pandemic. “This shows that additional revenue came from increasing fuel prices,” said KM Basave Gowda, president, Akhila Karnataka Federation of Petroleum Traders. Rising fuel prices boost Karnataka coffers by Rs 2,000 crore After the latest price hike of 25 paise per litre on Monday, fuel rates have hit their highest level in Karnataka since October 2018. Petrol is sold at Rs 87.7 per litre and diesel at Rs 79.6 per litre. The state’s revenue comes from sales tax, which is ad valorem in nature. Basically, the tax is levied on the sum of the base fuel price and central excise duty (CED). The quantum of the state’s revenue from fuel sales automatically increases when there’s a hike in the base price or CED. Going by Monday rates, the government earned sales tax of Rs 21.8 per litre of petrol, which is 35 per cent of the sum of the base price (Rs 29.3) and CED (Rs 32.9). For diesel, it is Rs 14.9, which is 24 per cent of the sum of the base price (Rs 30.3) and CED (Rs 14.9). In April 2020, crude oil prices, which drive the base rate, hit a low of $19 per barrel. The Centre still hiked CED by Rs 10 for both types of fuel, which helped the state get a steady flow of revenue despite low consumption. Karnataka also increased sales tax by Rs 1.6 per litre. The base rate, which remained stagnant until September, started to increase as crude oil prices climbed. Crude oil prices have touched $49 per barrel. BT Manohar, chairman (taxation committee), FKCCI, said: “While the state is benefiting from the ad valorem taxes, the price consumers are paying is inflationary. In the interest of industries and the general public, the government must reduce taxes.”
Low production due to COVID-19 raising fuel prices: Dharmendra Pradhan
Union Minister for Petroleum and Natural Gas Dharmendra Pradhan on Monday said fuel prices had gone up because of lower production in oil-producing nations due to the coronavirus pandemic. This lower production had caused an imbalance in demand and supply, the minister said. “Oil producing countries stopped production or reduced it during the coronavirus epidemic. A pressure on fuel prices was seen due to this imbalance in demand and supply. A few months ago, crude oil prices were USD 35-38, which has gone up to USD 54-55,” he told reporters here. “Our basic challenge is we have to import 80 per cent of crude oil of our requirement. Consumption has been increasing. India is third as far as energy consumption is concerned,” he said. He said the focus of the government was on electric vehicles (EVs), solar energy, production of ethanol etc to become self-reliant in the energy sector. Ethanol production, which was less than 1 per cent of demand when the NDA government came to power in 2014, was set to reach 9 per cent this year, he said. In reply to a query on some people doubting the efficacy of COVID-19 vaccines, Pradhan said countries across the world were looking at India with hope in the fight against the pandemic.
Canada urges Biden not to cancel oil pipeline Keystone XL on first day
Top officials in Canada want a chance to make the case for a long disputed oil pipeline to be built amid reports President-elect Joe Biden will cancel Keystone XL. Alberta Premier Jason Kenney said Monday he will seek legal damages if reports are true that Biden plans to scrap the pipeline on his first day upon taking office. Biden’s plan is outlined in transition documents seen by Canadian media outlets. “We hope President-elect Biden will show respect for Canada and will sit down and at the very least talk to us,” Kenney said. Biden spokesman Andrew Bates said Monday the transition team had no comment on the pipeline. A person familiar with the pipeline matter said Monday that the document cited by Canadian news media was a draft slide that was a few weeks old. Despite the timing suggested in the draft slide, everything on it “may not happen on day one,” the person said, speaking on condition of anonymity because they were not authorized to speak on the record on the matter. The 1,700-mile (2,735-kilometer) pipeline would carry roughly 800,000 barrels of oil a day from Alberta to the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. First proposed in 2008, the pipeline has become emblematic of the tensions between economic development and curbing the fossil fuel emissions that are causing climate change. The Obama administration rejected it, but President Donald Trump revived it and has been a strong supporter. Construction already started. Canadian Prime Minister Justin Trudeau raised Keystone XL as a top priority when he spoke with President-elect Biden in a phone call in November. The project is meant to expand critical oil exports for Canada, which has the third-largest oil reserves in the world. Trudeau and Biden are close and largely politically aligned, but the pipeline is expected to be an early irritant as Biden has said he would cancel it. “Surely the relationship between Canada and the United States is worth at least having that discussion,” said Kenney, whose province has a financial stake in the pipeline. After reports surfaced that it would be canceled on the first day of Biden’s term, Calgary, Alberta-based TC Energy Corp. announced late Sunday it would spent US$1.7 billion on a solar, wind and battery-powered operating system for the pipeline to ensure it is zero-emission by 2030, and to rely exclusively on union labor. Federal Natural Resource Minister Seamus O’Regan said in a statement his government continues to make the case for the pipeline to American colleagues. “Canadian oil is produced under strong environmental and climate policy frameworks, and this project will not only strengthen the vital Canada-U.S energy relationship, but create thousands of good jobs for workers on both sides of the border,” he said. Roland Paris, a former foreign policy adviser to Trudeau, noted it has been Biden’s position to cancel it for a long time. “Still, he should recognize that peremptorily revoking the permit without first giving Canada a chance to make its case wouldn’t exactly send a signal of renewed friendship that he has promised towards America’s closest allies,” Paris tweeted. Robin Rorick, a vice president of the American Petroleum Institute, an oil and gas industry trade group, said Keystone XL has been through 10 years of extensive environmental reviews. “Thousands of union workers are already a part of this responsible and sustainable project,” the trade group official said in a statement. “We urge President Biden to stand up for the thousands of good-paying union jobs tied to Keystone XL and ensure local communities across the country have access to the affordable, reliable energy that’s needed to power the nation’s economic recovery.”