INDIRECT TAXES
| Oil Ministry hopes for cut in duty on crude oil, diesel Thu, 24 Feb 2011 |
| NEW DELHI: The Union Petroleum Ministry is hopeful that Finance Minister Pranab Mukherjee will address its concerns and slash the 5 per cent duty on crude oil and reduce the excise duty on diesel to 2.5 per cent from the present 7.5 per cent while presenting the budget on February 28. With the crude oil prices touching a two-and-half year high of $108 a barrel, the Petroleum Ministry is waiting with a bated breath for the Finance Minister to dole out some concessions to avoid a petrol and diesel price hike that has become inevitable. “The spurt in international oil prices following crisis in Libya and other Middle East countries has meant that the difference between domestic retail selling price and the imported cost widens. This situation is not sustainable for long time and somewhere the government and the three oil marketing companies (OMCs) will have to take a call on the issue,'' Petroleum Ministry officials remarked. The Indian basket of crude oil touched $105.05 per barrel on Tuesday necessitating a hike in fuel prices. It will not be possible to raise price of petrol and diesel during the Parliament session as it will lead to a big ruckus. There are also concerns on the inflation side and the impact such a hike could have on the prices of food items and essential commodities,'' a senior Ministry official remarked. Petrol prices were last raised by Rs.2.50 a litre in January and it is being sold at a discount of Rs.2.50-2.75 a litre to its imported cost. On diesel, Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation lose Rs.10.74 a litre. Besides, they lose Rs.21.60 a litre on kerosene and Rs.356.07 per 14.2-kg domestic LPG cylinder. The three firms are now losing Rs.430 crore a day and at current rates are projected to end the fiscal with Rs.76,559-crore revenue loss. The Ministry is hoping that Mr. Mukherjee will abolish customs duty on crude oil and cut excise on petrol and diesel to avoid a further increase in retail prices. |
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