Excise reduction on petrol won't impact final price: Adhia

Randal Sanchez
February 2, 2018

Last week, the spurt in rates, caused by the rally in global oil prices, has led to the oil ministry asking the finance ministry for a cut in excise duty in the Union Budget 2018-19, to be presented in Parliament next week.

Petrol and diesel prices on Thursday hit a new high ahead of the presentation of the Union Budget 2018.

The October 2017 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. This net increase of tax by Rs 2 per litre on fuel will be offset by the Rs 2 per liter reduction in basic excise duty.

Keeping global factors aside, rise and fall in prices of petrol reflect worldwide trades.

In the budget, the Modi government has chose to reduce the excise duty on petrol and diesel by taking big decisions.

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The Budget reduced basic excise duty on branded and unbranded petrol as well as diesel.

"We are already on the cusp, in terms of oil prices". India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for about 40-50 percent of the pump prices.

Against the standard rate of 17 per cent general sales tax (GST), now the government is charging 31 per cent GST on high speed diesel (HSD) and 17 per cent on other petroleum products including petrol, kerosene oil and LDO. To the consumers, there is no change, " the Finance Secretary said.

The spokesperson further clarified that the overall increase in worldwide prices of crude oil has been around 8.07 per cent with HSD 8.68 per cent and kerosene oil by 8.09 per cent.

The move comes at a time petrol in Calcutta is being sold at Rs 75.74 per litre and diesel at Rs 66.78 per litre. He said the price for petrol has been increased by Rs2.98 per litre.

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