Petroleum ministry has asked the finance ministry to remove the 5% import duty on crude oil and reduce the excise duty on petrol and diesel in order to give relief to fuel retailers and consumers. The global surge in crude and product pricing has resulted in higher retail price of petrol in the domestic and has put pressure on revision of diesel prices where a hike has been prevented so far by the Centre?.
?We have made a proper representation to the finance ministry and we will do it again,? former petroleum minister Murli Deora told reporters after inaugurating a function on conserving oil and gas. Deora spoke to reporters in before assuming charge of the corporate affairs ministry in the evening at the cabinet reshuffle.
Deora said he has demanded a rollback of the 5% customs duty that finance minister Pranab Mukherjee had imposed on crude oil in his last budget. Also, the rupee one per litre increase in excise duty on petrol and diesel (also done in budget for 2010-11) needs to be reversed, Deora said.
Petroleum secretary S Sundareshan said the ministry has asked the finance ministry to provide a Rs 10,000-crore interim oil subsidy to ease the burden on oil marketing companies in the third quarter. This is in addition to the Rs 13,000 crore that the finance ministry has promised, but is yet to be released.
In June 2008, when global crude touched $135 a barrel, the Centre removed the 5% customs duty on crude and lowered the customs duty by a similar measure on petrol and diesel to 2.5%.
It also lowered the specific excise duty on petrol by Re one to Rs 13.45 and on diesel by a similar amount to Rs 3.6 a litre. However, in the 2010-11 budget, finance minister Pranab Mukherjee restored the petroleum taxes to the pre-stimulus levels. This was part of a partial rollback of the stimulus in his bid to steer fiscal consolidation. Now, with the crude price at above $90 a barrel, the Centre?s idea is to cut taxes and help consumers and fuel retailers.
?Crude oil prices have touched $92 a barrel and there are some forecasts that it will go to $100 a barrel soon. This is more than what oil marketing companies can handle. There is definitely a case for rolling back the duties imposed in the last budget,? Deora said.
Indian Oil Corporation is losing Rs 1.20 a litre on petrol sales despite last week?s Rs 2.50 a litre price increase, the minister said.