Excise duty will not be reduced on petrol and diesel: Economic secretary

The price of petrol has gone up by 55 months to Rs 74.63 per liter and the price of diesel has reached record high of Rs 65.93 per liter.

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New Delhi: Even though the prices of petrol and diesel have reached their 4-year high but the government is still not thinking about reducing excise duty on them. Economic Affairs Secretary Subhash Chandra Garg has said that the government is not considering reducing excise duty on petrol and diesel as the price of oil has not reached the level that the need to reduce excise duty.

State oil companies have not revised prices of petrol and diesel for almost a week. After this, the price of petrol has gone up to 55 months high of Rs 74.63 per liter and the price of diesel has reached record high of Rs 65.93 per liter.

Subhash Chandra Garg said that the prices of oil can affect the government's budget, which could increase the prices of domestic cooking gas (LPG). At present, the government gives subsidies. He said, "Apart from cooking gas, no subsidy is being given directly to any commodity. If petrol-diesel prices reach one level then excise duty can be considered. It has not happened yet. Garg did not tell what level it would be that the excise duty would be reduced after reaching it. He said, "If the price does not increase then there is no question of cut excite duty." The reduction of every rupee on petrol and diesel is a revenue loss of Rs 13,000 crore.

When asked by Subhash Chandra Garg whether the excise duty can be reduced before the Karnataka elections, he said that there is no such idea.

The central government levies excise duty of Rs 19.48 per liter on petrol and Rs 15.33 per liter on diesel and state tax and VAT vary from state to state. At present, VAT is charged at petrol of Rs 15.33 per liter in Delhi and Rs 9.68 per liter on diesel.

The government is hoping that global tension will come down and the rising oil prices of US shell oil will reduce oil prices which have reached near high levels of nearly 3 years. Garg said that if the situation of demand and supply is seen, there is no indication of the price of oil going up. In recent times, due to rising oil prices, stock prices are declining, trade tensions and geo-political reasons coming from Syria-Korea are being told.

According to Garg, the situation of demand supply is going to improve, geopolitical issues are also coming in the way, so I do not think oil prices will go up and that's why these prices should come down.

State oil companies have been constantly changing fuel prices since June last year, they have not changed the price of petrol and diesel for the sixth consecutive day today. The price of petrol in Delhi is Rs 74.63 per liter, which is highest since September 2014 when prices were Rs 76.06 per liter. Diesel prices are high at Rs 65.93 per liter till now.

From November 2014 to January 2016, the government has increased excise duty up to 9 times, while in October last year, it had reduced by Rs 2 per liter. Prices of petrol and diesel in India are highest in South Asian countries because tax on this is equal to half of pump rates.