NEW DELHI: For the second year in a row, the Central government is going to see the excise duty collection from petroleum products falling. In 2022-23, the fall is likely to be much sharper than it was in the previous year. According to government estimates, excise duty collection from petroleum products in 2022-23 is likely to be around R3 lakh crore compared with R3.63 lakh crore in the previous year.
The fall is owing to a sharp excise duty cut in May 2022, when the government was forced to slash excise on petrol by R8 per litre and R6 per litre on diesel as international crude prices had breached $115 a barrel. Petrol prices in some places during May 2022 had touched R120 a litre, while diesel prices had crossed R100 a litre mark.
Though crude oil prices have since moderated and fallen below $80 a barrel, the government has not hiked the excise duties. This has impacted the excise duty collection in 2022-23. According to government data, the government has collected R2.51 lakh crore in excise duty from petroleum products in the first 11 months of 2022-23.
During the same period the previous year, excise duty collection was around R3.06 lakh crore. A part of this loss is likely to be made good by collections from the levy of windfall gains tax on exports of crude oil and refined petroleum products. The government expects to collect R25,000 crore from windfall gains tax in 2022-23.