Petroleum Ministry seeks excise duty cut on diesel

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The impact of downward reduction of Rs 2 on petrol and Re one on diesel, if any, will result in additional burden of Rs 1,300 crore approximately for the remaining part of the financial year. This, according to sources can be absorbed by the overall commitment of oil bond that the Finance Ministry had indicated in June 2006.

The Communist Party of India (Marxist) Politburo Member, Mr Sitaram Yechury, who met the Petroleum Minister sought reduction in prices of petrol and diesel. The Government had increased prices of petrol and diesel when international crude oil prices had gone up, he said adding that since prices have now come down, it should reduce prices of these petroleum products.

'In the forthcoming budget, the duties on petroleum products should be minimum,' he said. Currently, the excise duty on diesel stood at 8.16 per cent plus Rs 3.32 a litre. Besides, the Finance Ministry is also getting increased revenues from raising cess on domestic crude oil to Rs 2,500 per tonne from Rs 1,800 per tonne previously, the official said. It is slated to get Rs 6,700 crore this year against Rs 5,100 crore previously, the incremental revenues more than compensating for the excise duty cut, he added.

The Petroleum Ministry was seeking a shift to specific duties on fuel from the current mix of ad-valorem and specific duties. The current excise duty on petrol is 8.16 per cent of ex-factory price plus Rs 13.26 a litre.

Taken from Business Line

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