The government is not planning to raise excise duty on petrol and diesel to mop up gains accruing from oil prices that slumped to six-and- half year low, a top official said as per the PTI.
The government had in four installments raised excise duty on petrol and diesel between November and January to take away the reduction in retail rates that was warranted from falling international oil prices.
The four excise duty hikes between November and January totalled Rs 7.75 per litre on petrol and Rs 6.50 a litre on diesel. But for the excise duty hikes, consumers would have benefited by reduction in retail rates to that extent.
"There is no move to raise excise duty... I mean we will not raise it unless oil falls to USD 30 (per barrel) level," the official said.
International oil prices slid to a fresh six and a half year low in Asia today, approaching the key USD 40 a barrel level after a surprise rise in US inventories added to concerns of a supply glut.
US benchmark West Texas Intermediate (WTI) for delivery in September dipped 32 cents to USD 40.48 after falling sharply in New York to its lowest level since March 2009. Brent crude for October dropped 25 cents to USD 46.91 a barrel.
The drop in international oil prices will translate into further cut in retail selling price of petrol and diesel at the month end if the government was not to take away gain before that.
Despite excise duty hikes, petrol prices have been cut by Rs 10.40 per cent litre in several installments since July 2014. Petrol price in July last year was Rs 73.60 a litre in Delhi which currently is Rs 63.20.
Similarly, diesel rates have been cut by Rs 12.89 - from Rs 57.84 per litre in July 2014 to Rs 44.95 this month.
The four excise duty hikes between November and January had led to about Rs 20,000 crore in additional revenue to the government, helping it meet its fiscal deficit target.
Tax on petrol and diesel was first hiked by Rs 1.50 a litre each from November 12. Then again from December 2, the excise duty on petrol was raised by Rs 2.25 per litre and by Re 1 on diesel.
This was followed by government hiking excise duty on petrol and diesel by Rs 2 per litre each from January 2 and a similar proportion from January 16.