Excise duty is likely to be increased by Rs 3 per litre for diesel and Rs 6 per litre for petrol. Any further increase in duty should not show too much of an impact for consumers.
Financial pressures resulting from the ongoing COVID-19 pandemic may push the Centre to raise further raise the excise duty on petrol and diesel.
According to an IANS report citing sources, excise duty is likely to be increased by Rs 3 per litre for diesel and Rs 6 per litre for petrol if the government feels it necessary to mobilise more resources to finance additional economic recovery packages, which Finance Minister Nirmala Sitharaman had hinted at earlier in October.
Moneycontrol could not independently verify the report.
By increasing the duty, the government could receive additional revenue to the tune of Rs 60,000 crore for the full year. During the balance period, about Rs 30,000 crore could be mobilised.
In addition to this, there is an ongoing internal examination which is looking into duty structure on the two products, the report said.
The government had taken parliamentary approval in March to raise special additional excise duty on petrol to Rs 18 per litre and on diesel to Rs 12 per litre, exercising and raising the special additional excise to Rs 12 on petrol and to Rs 9 on diesel in May. This leaves further room for the remaining amount to be increased.
Any further increase in duty should not show too much of an impact for consumers. Retail prices may be left unchanged or increased only marginally as the price of global crude softens to $40 per barrel, from a $45 price tag earlier that was a month-long high.A further increase in taxes would account for 75-80 percent of the cost of the fuels, from the existing 70 percent levels. That would make the fuels the most taxed globally.