NEW DELHI: The Central government is set to cut excise duty on petroleum products only if brent crude prices go beyond $50/barrel. “We will consider reducing the excise duty on petroleum if crude stays beyond $50 for a certain period,” a senior finance ministry official said.
However, official further added that the government does not expect crude oil price to average above $50 during the current financial year.
The oil marketing companies raised petrol price by Rs 2.58 per litre and diesel by Rs 2.26 a litre from Wednesday. This is the fifth increase in auto fuel prices since March, barring the reduction on April 16 when petrol price was cut by Rs 0.74 a litre and diesel by Rs 1.30 a litre. The central government raised duties nine times to capture the benefit of sharp slump in oil prices since second half of 2014 and 2015.
Meanwhile, the finance ministry on Wednesday said the government oil prices are under control and extra collections from petrolem taxes are being used to build infrastructure in the country. “Oil prices, the government is keeping a close watch...it is under control so we don't see any cause of alarm as of now,” economic affairs secretary Shaktikanta Das on Wednesday said.
“Government is using entire collections from excise duty (on petrol and diesel) for building mainly rural infrastructure, roads and railways. This has a multiplier effect on the entire economy,” Das added.
The central government taxes were Rs 21.91 per litre of petrol and on diesel Rs 17.71 per litre.