Govt hikes excise duty on petrol, diesel as prices fall
13 November 2014
Amidst reports of an imminent cut in the prices of petrol and diesel, the government today announced a hike in the excise duty on petrol and diesel in order to boost its dwindling revenue collection, thereby raising their prices instead.
State-run oil marketing companies today raised the prices of petrol and diesel by Rs1.50 per litre, which could help the government mop up an additional revenue of about Rs13,000 crore.
Unbranded petrol will attract a basic excise duty of Rs2.70 per litre as against the existing Rs1.20 a litre, according to a notification issued by the Central Board of Excise and Custom (CBEC). On branded petrol, the duty has been raised to Rs3.85 a litre from Rs2.35 a litre.
Apart from a basic rate, there is special additional excise duty and additional excise duty on both types of petrol.
The new rates come into effect from midnight today.
For unbranded diesel, the basic excise duty will be Rs2.96 a litre as against Rs1.46, while on branded diesel it will be Rs5.25 a litre against Rs3.75 a litre.
For diesel, however, there is no special additional excise duty on both branded and unbranded diesel, but there is an additional excise duty apart from basic excise duty.
As of now, state-run oil marketing companies are making a profit of Rs1.90 on a litre of diesel.
The duty hike comes in the wake of a sharp fall in the prices of crude in the international market.
The continued fall in international oil prices had resulted in six consecutive reduction in petrol prices since August and two in diesel in the last one month and there was possibility of another round of cuts this weekend.
But that has now been negated as the government decided to raise excise duty to shore up its revenue.
Petrol and diesel prices were to be cut by close to Rs1 per litre this weekend on the back of sliding global oil rates. It would have been the seventh reduction in petrol prices since August and the third for diesel since its decontrol last month.