It shows the increase in government revenues and government expenditure (or oil subsidy) for every $10 a barrel rise in oil prices. The subsidy on cooking gas and kerosene (fuel products on which the government still compensates after diesel and petrol were deregulated) increases to Rs18,400 crore. But then, higher crude oil prices also bring in higher revenues for the government.
Analysts from Jefferies India Pvt. Ltd write that excise collections from petrol/diesel do not rise but customs duties, GST (goods and services tax), royalties, cess and profit share do, as do the earnings of upstream state-owned enterprises that bring higher corporate taxes, dividends and dividend taxes. “Indeed, these offset ~90% of the impact of higher subsidies leaving the budget largely agnostic to changes in oil prices unlike in the past,” pointed out Jefferies in a report in December.
Read More:- Commodity Market Status
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