NEW DELHI: Fuel consumers are unlikely to get any relief as far as petrol and diesel prices are concerned, with government sources stating that the cash-strapped Centre is in no mood to reduce taxes on fuel in case another stimulus is required.
According to sources in the finance ministry, during a recent meeting, the Department of Revenue even indicated that there is still some headroom for the government to increase petroleum taxes.
“The government has so far been prudent in its measures. Unlike other countries, we have not increased tax. In case additional stimulus is required, we still have some headroom, without increasing the borrowing limit. We can increase duty on petroleum by Rs 3-4 which will help us generate about Rs 50,000 crore,” a senior official in the finance ministry said.
The Centre has already received Parliament’s approval and may raise duties by another Rs 3-6 per litre when necessary.
The Centre on May 5 had already raised excise duties on petrol and diesel by an unprecedented level of Rs 10 and Rs 13 per litre respectively.
According to experts, even by the conservative estimates, this is expected to provide additional revenue of about Rs 1.75 lakh crore to the central exchequer in the current fiscal year.
The Centre has also already revised its borrowing target in the current financial year to Rs 12 lakh crore against Rs 7.80 lakh crore announced in the budget.
And it is not just the Centre which has increased taxes on petrol and diesel, but state governments too.
The taxes collected by both Centre and states this fiscal on fuel is set to be significantly higher than the previous year.
Sources have confirmed that the Finance Ministry has already rejected a proposal by the Petroleum Ministry to reduce cess on domestic crude production.
Currently, the Centre’s tax on diesel (basic excise, special additional excise and road/infra cess) stands at Rs 31.83/litre, against Rs 15.83/litre in October 2019.
Corresponding figures for petrol are Rs 32.98 and Rs 19.98. On Tuesday, petrol was selling at Rs 81.06 per litre in Delhi and diesel at Rs 79.46 per litre.