Oil Minister Dharmendra Pradhan today remained non-committal on cutting excise duty on petrol and diesel to cushion the rise in retail fuel prices that followed the rally in international oil rates.
Oil Minister Dharmendra Pradhan today remained non-committal on cutting excise duty on petrol and diesel to cushion the rise in retail fuel prices that followed the rally in international oil rates. Petrol and diesel prices have risen by almost Rs 1.5 per litre in the last one month, taking away bulk of gains that accrued from a one-off cut in excise duty cut on the two fuels. “Let us see,” Pradhan told reporters when asked if the government would cut excise duty on petrol and diesel in view of the rally in international oil rates. Brent futures this week touched USD 64.65 per barrel before retracting a bit. For much of this year, oil prices have been around USD 55 per barrel.
The government had in October cut excise duty on petrol and diesel by Rs 2 per litre in a bid to moderate the relentless rise in fuel prices witnessed in the previous three months. After the cut, petrol price came down to Rs 68.38 per litre and diesel to Rs 56.89 in Delhi on October 4. Rates have since climbed to Rs 69.85 per litre for petrol and Rs 58.31 for diesel in the national capital.
The excise duty cut cost the government Rs 26,000 crore in annual revenue and about Rs 13,000 crore during the remaining part of the current fiscal year that ends on March 31, 2018. The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.
In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped government’s excise mop-up more than double to Rs 242,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. State-owned oil companies in June dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight starting June 16 dropped but have been on the rise since July 4.