Centre hikes excise duty on fuel

NEW DELHI: The National Democratic Alliance (NDA) government raised excise duty on petrol and diesel by ~3 per litre on Saturday, adding to the windfall gains it stands to reap from a slump in global crude oil prices and giving itself room to stimulate a slowing economy that’s now bracing for fallout of the coronavirus pandemic.

The main opposition party, the Congress, criticised the move, which is expected to result in additional revenue of ~40,000 crore to the government, as “anti-people” on the assumption that it would lead to an increase in prices at the pump.

Instead, oil marketing companies cut the price of petrol by 13 paise per litre and that of diesel by 16 paise per litre. A litre of petrol cost ~69.87 per litre and diesel ~62.58 per litre at the pump on Saturday following the increase.

A g o v e r n ment official described the increase in excise duty on fuel, taxes on which make up one-third of retail prices, as a “measure of fiscal prudence”. The hike would provide extra resource to fund infrastructure and other development projects at a time when government finances are tight, the official said on condition of anonymity. Effectively, central levies on petrol add up to ~22.98 per litre and on diesel to ~18.83 per litre after the increase.

A slump in global crude oil prices on March 10, after a price war erupted between Saudi Arabia and Russia, resulted in a decline in the price of Indian basket o f c r ude purchases t o ~2,552.56 per barrel, a level close to what it was on December 16, 2015, when petrol was selling at