In the last few days, fuel prices have touched record highs, with petrol costing Rs 76.87 per litre in Delhi and diesel Rs 68.08 a litre. In the last nine days, the price of petrol has risen by Rs 2.24 and diesel by Rs 2.15.
New Delhi: Fuel prices are likely to be slashed by Rs 2 to Rs 4 in the next few days and a decision will be made after discussions involving the Prime Minister’s Office, the finance and oil ministries and state-owned oil marketing companies such as Indian Oil and BPCL, officials in the finance ministry said on Tuesday.
The officials, who spoke on condition of anonymity, said part of the cut would come from a reduction in state or central government duties on fuel and part from dealers taking a cut in their commissions and being reimbursed by the oil marketing firms.
Taxes account for between 37% and 47% of the retail price of fuel and dealer commissions between 3.8% and 4.8%.
“Measures will have to be taken in coordination by the ministries of finance and oil. This crisis has been created due to both a weakening rupee and rising crude (prices),” said a finance ministry official who did not wish to be named.
For every rupee cut in excise duty on petrol and diesel, there is a Rs 13,000-14000 crore hit to the exchequer.
In the last few days, fuel prices have touched record highs, with petrol costing Rs 76.87 per litre in Delhi and diesel Rs 68.08 a litre. In the last nine days, the price of petrol has risen by Rs 2.24 and diesel by Rs 2.15.
Oil marketing firms have increased prices on each of the nine days.
The finance ministry has prepared data on duties and taxes on fuel.
It has also worked out the math of the amount of taxes that are shared with states as part of the devolution formula and what goes to the exchequer. The central government levies excise duty on fuel and the states, Value Added Tax or VAT.
Please click here to read more.