NEW DELHI: Consumers are unlikely to get any immediate relief from the exorbitant prices of petrol and diesel. That’s because the Centre may not slash excise duty on fuel this financial year to cushion spiralling prices as it has limited fiscal space available to take any dent in revenue collections, a top official said.
According to sources in the Finance Ministry, the central government has set its receipt target and with the revised fiscal deficit targeted at 9.5 per cent, of the gross domestic product (GDP), the government is in no mood to go for any duty cut.
“There is a proposal for a duty cut but we do not see it happening till March 31. But, the Centre is in touch with the state governments, which has a very high duty. Negotiations are on,” a senior official from the Finance Ministry told this publication.
Petrol, diesel and LPG prices have touched an all-time high and despite some softening in global crude oil price, there has been no relief on the bills of the common people.
On Tuesday, the price of petrol reached Rs 91.17 in Delhi, while diesel price touched Rs 81.47. In Mumbai, the cost of petrol was Rs 97.57, and the price of diesel has reached Rs 88.60 per litre. However, with both Centre and state parched for funds, they are not going to reduce either the Centre excise duty or the state’s share of Value Added Tax (VAT).
A closer look at the price break-up shows that the basic price of petrol is Rs 31.82 per litre in Delhi, but then there is an excise duty of Rs 32.9 per litre and value-added tax of Rs 20.61, taking the total tax share of the respective governments to Rs 53.51 per litre.
Similarly, the basic rate of diesel in Delhi is Rs 33.46 per litre, but the total tax on it is Rs 43.48 per litre. This includes excise duty of Rs 31.80 per litre and value-added tax of Rs 11.68 per litre.
With assembly elections round the corner, fuel prices have become one of the electoral issues.
However, despite opposition flagging the price in their campaigns, the Centre will not deviate from the receipt target.
Earlier, Finance Minister Nirmala Sitharaman had said that petrol and diesel prices are fixed by oil companies and not by the Centre.