Fuel tax may not be cut till revenues normalise

Retail prices of petrol and diesel could well be touching record highs, but the government is unlikely to lower the excise duty on the two auto fuels till its revenue position normalises, three senior government officials said.

In a recent communication to the Prime Minister's Office, officials from the Department of Revenue have advised against cutting excise duty on fuel before March, one of the officials told Cogencis.

"Since this (duty hike) will be a more political decision, we expect it to be closer to the Bengal elections," the official said.

"I highly doubt we will have anything on the excise duty in the Budget."

"The focus is on the Budget, no other issue is being debated or discussed right now," a second official said, when asked whether the finance ministry is considering lowering the duty on petrol and diesel.

Following the sharp fall in tax revenues on account of the lockdown to curb COVID-19 pandemic, the government had in May raised excise duty on petrol by 10 rupees per ltr and diesel by 13 rupees per ltr.