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Govt likely to reduce excise duty on petrol, diesel

19 May 2016 Evaluate

With the global crude oil prices rising to six-month high, the finance ministry is considering reducing the excise duty on petrol and diesel to cushion inflation.  Revenue secretary Hasmukh Adhia has said that the reduction will be there depending upon the international market. He added that “There could be downward revision also. The duty hike may have given good collections, but we cannot allow inflation to go out of hand. We have to be careful about inflation”

Furthermore, Petroleum minister Dharmendra Pradhan has said that the government has passed 60% of the benefit of fall in crude oil prices to consumers while the remaining 40% is being utilised for infrastructure development. However, the observation made by the the 12th report submitted on May 3 by the standing committee on petroleum & natural gas does not match Pradhan’s claim.

The committee observed that the retail prices of petrol and diesel in the country have not been reduced to the extent of the reduction in international prices as a result of increase in central and state taxes’ component on petroleum products. Last time the government raised excise duty on petrol and diesel was on February. The duty on petrol has been raised by Re 1 per litre, while that on diesel by Rs 1.50 per litre.

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