New Delhi: Petrol and diesel prices will not be increased following government's decision to hike excise duty by Rs 1.60 per litre and 40 paise a litre respectively as state-owned oil companies have decided to absorb the raise for the time being.
The government late on Friday night raised excise duty on petrol and diesel to mop up additional revenue to meet budgetary targets. "There will be no change in retail prices of petrol and diesel for now," a top oil company official said. "We are not passing on the excise duty hike as of now."
The increase in excise duty on the fuels is likely to yield an additional revenue of about Rs 3,200 crore to the government during the rest of the current fiscal. The government had collected Rs 99,184 crore in excise collections from the petroleum sector in 2014-15. This was Rs 33,042 crore in the first quarter of current fiscal.
The basic excise duty on unbranded or normal petrol was increased from Rs 5.46 per litre to Rs 7.06 a litre, according to a CBEC notification.
After including additional and special excise duty, the total levy on petrol will be Rs 19.06 per litre as against Rs 17.46 at present. Similarly on unbranded or normal diesel, excise duty has been increased from Rs 4.26 per litre to Rs 4.66 a litre. After including special excise duty, total incidence of excise duty on diesel will be Rs 10.66 per litre as against Rs 10.26 now.
The excise duty on branded petrol has been hiked from Rs 6.64 to Rs 8.24 per lire. Special and additional excise duty of Rs 12 per litre will continue as before. On branded diesel, excise duty has been increased from Rs 6.62 to Rs 7.02 per litre. Additional excise duty of Rs 6 per litre will continue as before.
The government had previously in four installments raised excise duty on petrol and diesel between November 2014 and January 2015 to take away the reduction in retail rates that was warranted from falling international oil prices.
The four excise duty hikes during this period totalled Rs 7.75 per litre on petrol and Rs 6.50 a litre on diesel. It 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 raised by Rs 1.50 a litre each from November 12, 2014.
Then again from December 2, 2014, 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, 2015 and a similar proportion from January 16, 2015.