No excise duty cut on petrol, diesel for now: Economic affairs secy
The government is not considering cutting excise duty on petrol and diesel yet as rates have not touched levels that could trigger such an action, said economic affairs secretary Subhash Chandra Garg.
State oil firms have not revised petrol and diesel price for almost a week now. This after petrol price hit a 55-month high of ₹74.63 a litre and diesel rates climbed to a record high of ₹65.93.
In an interview to PTI, Garg said oil prices can impact the government’s fiscal maths if they result in a spike in rates of domestic cooking gas (LPG)— the only commodity that is subsidised now. “Otherwise there is no direct subsidy any longer,” he said.
“Indirect subsidy/impact comes, if crude oil prices reach a certain level (and) there might by some rethink about excise duty etc. That’s not happened so far.”
Without indicating the level of oil prices that could trigger an excise duty cut, he said, “If the level (of prices now) does not go up, there is no reason (for excise duty cut).”
Every rupee cut in excise duty on petrol and diesel will result in a revenue loss of ₹13,000 crore. Asked if there is any thinking of cutting excise duty or asking PSU oil firms to hold rates till elections in Karnataka, he said, “We have not seen anything (on it).”
The central government levies ₹19.48 a litre of excise duty on
NEW DELHI:
petrol and ₹15.33 per litre on diesel. State sales tax or VAT vary from state to state.
In Delhi, VAT on petrol is ₹15.84 and ₹9.68 a litre on diesel.
The government is hoping that geopolitical tensions would ease and US shale oil would help ease oil prices that are near three-year high.
“Fundamental reasons, to my mind, don’t exist for oil prices to go up further from both demand and supply situation,” Garg said.
The recent spurt may have been because of stock drawdowns, trade tensions and geopolitics around Syria and Korea.
“I think demand-supply situation is also turning alright. I think those (geopolitical issues) are also getting out of the way. So I don’t expect prices to go up further and that’s why I said ideally it should come down,” he said.
State-owned oil firms, which have been since June last year revising auto fuel prices daily, on Monday kept petrol and diesel rates unchanged for the sixth day in a row.