New Delhi: Consumers of petroleum products may be deprived the full benefit of falling global crude oil prices, as India Thursday hiked the excise duty on petrol and diesel by Rs.1.50 per litre with immediate effect.
Even as Revenue Secretary Shaktikanta Das said the excise duty hike will be absorbed by oil marketing companies, it was not clear if the cut in retail prices expected Saturday will take into account the hike in the excise levy.
According to a notification issued by the Central Board of Excise and Customs, the basic excise duty on unbranded petrol will be Rs.2.70 a litre as against Rs.1.20 a litre. On branded petrol, the duty has been raised to Rs.3.85 a litre from Rs.2.35 a litre.
Similarly, on unbranded and branded diesel, the quantum of hike was similar, taking the revised excise levy to Rs.2.96 per litre and Rs.5.25 per litre, respectively.
The new rates come into effect immediately.
Apart from a basic rate, there is special additional excise duty and additional excise duty on both types of petrol. These stand untouched.
The move, according to finance ministry officials, could fetch around Rs.6,000-Rs.7,000 crore, which will be shared by the central government and the states as per the prescribed formulae.
An official source in the finance ministry explained the economics behind hiking the excise duty, a major portion of which goes to the states, particularly in the wake of a fall in the global crude oil prices to a four-year low.
Speaking on condition of anonymity, the official said the over-recovery, or profit, that state-run oil marketing companies have now been making on transport fuels, had gone up to around Rs.1.70 a litre. Of this, the government has taken a credit of Rs.1.50.
"Oil marketing companies still stand to make a profit of 20 paise per litre," he said.
As a consequence, he added, consumers will feel no impact of Thursday's excise hike. But with the price of both petrol and diesel having been decontrolled, oil marketing firms are unlikely to ignore the excise hike while revising their prices.
Continuing their plunge, international crude oil prices went below $80 a barrel mark. The Indian basket crude oil price on the last trading day Tuesday fell to $78.92.
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