New Delhi: The Union Budget might bring down the excise duty on petroleum product slightly, leading to a subsequent reduction in petrol and diesel prices.
Petroleum Minister Murli Deora dropped such a hint on Monday when he said a reduction in auto fuel prices is necessary at this moment in order to contain the growing inflation.
PTI quoted Deora as saying that he has asked Prime Minister Manmohan Singh for a Re 1 per litre excise duty cut on crude oil to facilitate a downward petrol price review.
If Deora's request is heeded, petrol price can be cut by Rs 2 per litre and that of diesel by Re 1 per litre. Deora said he has written to the PM and Finance Minister P Chidambaram stating that the rise in international oil prices this month has seen an erosion of gain on diesel sales.
Oil firms are making a loss of Rs 0.30-0.35 a litre on the sale of this most consumed auto fuel. The hardening of international oil prices, which has seen Indian basket of crude rise from $51.74 a barrel in the second fortnight of January to $56.18 this month, has also reduced the profit made on petrol from Rs 3.50 a litre to less than Rs 2 a litre.
"For a very brief period, oil companies made a profit of about Rs 0.50 a litre on diesel, but it has evaporated. There is a loss on diesel sale, leaving no scope of price reduction unless the Government decides to cut excise duty," the official told PTI.
The current excise duty on diesel is 8.16 per cent plus Rs 3.32 a litre - the two together translating into a total levy of Rs 4.98 per litre. Last year, the excise duty on diesel was Rs 3.41 per litre.
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