Consumers should prepare themselves for a hike in the prices of petrol and diesel in April. While oil companies — Indian Oil, Bharat Petroleum, Hindustan Petroleum and IBP — have worked out a Rs 1.25 per litre increase in the price of diesel and around Rs 2.50 a litre in petrol, the exact quantum of hike to be passed on to the consumers is still undecided.
However, what is imminent is that the 50 paise additional road cess imposed by the finance minister in the Budget will be passed on to the consumers in April. With Parliament in session, oil companies have been asked to withold the price hike for the month of March.
According to petroleum minister Mani Shankar Aiyar any increase in the price of these two fuels has to be cleared by the Cabinet.
“Petroleum ministry will seek the Cabinet’s advice on whether or not to pass the impact of excise duty hike on petrol and diesel. I am readying myself to go to the Cabinet to secure instructions as how to proceed further. This will take a few we-eks time. Till such time, there will be no change in prices,” Mr Aiyar added.
In the absence of clarity from the government on the issue of fuel price hike, the oil firms will have to bear an additional burden of Rs 550-600 crore a month.
What has led to the increase? The culprit is the new taxation rates (both customs and excise) on crude and petro petroleum products (petrol, diesel, LPG, kerosne and others) besides a 50 paise road cess on petrol and diesel.
In case of petrol, after taking into account the customs duty cut to 10% from 15% besides the change in excise duty from 23 % plus Rs 7.5 per litre (including Rs 1.5 a litre road cess) to 8% plus Rs 13 per litre (including Rs 2 per litre road cess and Rs 6 a litre special additional excise duty), the oil companies have worked out an increase of Rs 2.50 per litre.
Similarly, excise duty on diesel has been changed from 8% plus Rs 1.50 per litre (road cess) to 8% plus Rs 3.25 per litre (including Rs 2 per litre road cess), warranting a Re 0.65 a litre increase.
“We are weighing in the implications of Budget for the entire range of proposals for the oil sector,” Mr Aiyar added.
Customs duty on crude oil has been halved to 5% while that on petroleum products like petrol and diesel has been reduced from 15% to 10%. Subsidised products like domestic LPG and PDS kerosene will attract nil customs duty. For all other petro products the import duty stands reduced from 20% to 10 %.
