Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, met on Friday and took the much-deferred politically sensitive decision, which Oil Minister S Jaipal Reddy said was done to cut down on burgeoning under-recovery of oil marketing companies.
The under-recoveries which stood at Rs 1,71,140 crores will now come down by Rs 21,000 crores after Friday's decision.Friday's decision comes more than a month after petrol price was hiked by Rs 5 a litre.
Reddy told a press conference that the price of diesel would be raised by Rs 3 a litre, kerosene supplied through PDS by Rs 2 per litre and domestic LPG by Rs 50 a cylinder.He described the increase as "very modest and minimal".Giving details of the duty restructuring, Reddy said the meeting decided on elimination of 5 per cent customs duty on crude oil and all petroleum products , that will result in a revenue loss of Rs 26,000 crores for the government for the full fiscal year.
The excise duty on diesel has been reduced from Rs 4.60 a litre to Rs 2 a litre which will entail a revenue loss of Rs 23,000 crore during 2011-12.He said it could not be cut any further as the special excise duty and the additional excise duty have been earmarked for the central road fund and the educational cess. On both these accounts, the government will incur a loss of Rs 49,000 crore.
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1 comment:
Its surprising to understand the Logic behind this when International Crude has come down from $114-$ 116 to $90 today. Time has come to Decontrol entire petro sector and import of CRUDE should be made effective and transperent. All the exise duty including state goverment levy should not exceed VAT Charged by Goverment. Goverment should emphasis and encourage more on alternative source of energy. ABOVE ALL THEY SHOULD TAKE OUT TIME AND THINK HOW COMMON MAN WILL WITHSTAND THIS PRISE RISE. BE PREPARED TO GO IN SUPER INFLATION ERA??
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