He also undid the drop effected in the administered price of the petroleum product barely 27 days ago, vindicating predictions that the 10 per cent reduction in diesel prices was a pre-Budget move to make way for the surface transport ministry's demand for a Re 1 cess for road development.

At the time of going to the press, the petroleum ministry was working on the new diesel price, which becomes effective from Saturday midnight. Diesel prices were close to Rs 9 a litre (not counting state levies) after the 10 per cent drop and before the Re 1 hike was announced.

As Sinha candidly told the House, ``What the petroleum minister giveth, the finance minister taketh away.'' The additionalduty is expected to rake in Rs 363 crore in the way of countervailing duty on imported and domestically produced diesel.

The excise collections from diesel are expected to be another Rs 4,591 crore. Diesel comprises close to 42 per cent of the total petroleum products consumed at home, making it an ideal horse to flog for the revenue department.

``Currently, international and domestic prices of crude oil and petroleum products are unusually soft, and it is felt that raising some additional revenue through this commodity would be an equitable method of resource mobilisation,'' Sinha said, leaving no room for misinterpretation.

The diesel price drop had been a declared attempt to pass on the benefits of low oil prices to consumers. The Centre is committed to adjusted import parity in pricing diesel.

Diesel becomes the milching cow for development projects for the second time. The Centre levied a Re 1 cess on diesel in June last year, to build a Central Road Fund. Half the proceeds of the additional dutyof Re 1 per litre of diesel will once again, flow into the Central Road Fund.

The remaining half of the kitty (or 50 paise of every rupee collected on diesel) will support rural development and social sector programmes. State governments will have access to 30 per cent of the Central Road Fund, for building and maintaining roads.

The rest of the kitty will be used to build national highways, expressways, railway over-bridges, crossings and safety works. The Central Road Fund will help cover the gap in the Plan resources of the ministry of Railways.

Petroleum products will also continue to shore up the Central coffers, notwithstanding a policy decision taken to taper down duties by the terminal year of the administered pricing of petroleum products in 2001-02. The import duty on crude, scheduled to range between nil and five per cent by 2002, only came down to 20 per cent, from 22 per cent prevailing last year.

Import duties on petroleum products, like aviation turbine fuel (ATF), light diesel oil,high speed diesel (HSD) and motor spirit (petrol) destined to fall to 15 per cent in three years, have only been knocked down by two per cent. The hike in excise duties (also planned) has been equally gradual.

In the case of ATF, which is scheduled to attract a 40 per cent duty by 2002, the increase in excise duty is only one per cent. The excise on motor spirit remains constant at 32 per cent. The eight per cent reduction in the basic duty on petrol has been made up by a special duty of eight per cent.

The real blow for the oil industry will be the five per cent duty levied on project imports. New refineries had been allowed to import capital goods free of duty last year and existing refineries were demanding the sop for their expansion projects.

The message at the end, if somewhat smudged, is that commitments to the oil industry reforms process stays on track, to the extent to which it pleases the revenue department.