Diesel: Petrol price difference merely 8 bucks now

Chelsea West
February 2, 2018

In a rejig of excise duty on petroleum products, the union government on the Budget Day cut basic excise duty on petrol and diesel by Rs 2. However, that made no difference to the rising petrol and diesel prices as this Rs 8 amount was converted to "road cess" on fuel, thereby, making no change in the price of petrol and diesel for the consumer effectively.

In the budget, the Modi government has chose to reduce the excise duty on petrol and diesel by taking big decisions.

Ahead of the release of Budget, speculations were rife over the government rolling out measures to control the raging fuel prices, especially petrol which has crossed the Rs 80-benchmark in Mumbai, Delhi, Bengaluru, Pune, Chennai and Noida.

The government has cut excise duty by Rs 2 and it now stands at Rs 4.48 per litre.

Since then prices are revised on daily basis.

The cost of both diesel and petrol is now at its highest since late 2014, new data from RAC Fuel Watch shows.

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The government has excluded petrol and diesel from the ambit of GST (Goods and Service Tax).

The high costs are due to the rising price of oil which recently increased by 2%, although this has been offset to some extent by the recent boost to the pound. Speaking to the public, they still have to buy petrol and diesel at the same price as it is now.

With this reduction, the FM said the government will bear the revenue loss of Rs 13,000 crore in the remaining part of FY18.

During October month, Moody's said, "There is limited flexibility for the government to reduce taxes further if it were to maintain its fiscal discipline".

Union Finance Secretary Hasmukh Adia told a post-Budget media briefing that the changes won't affect the customer.

CLSA on Jaitley's decision said, "There has been some re-jigging of the excise classification (infra/road cess and basic excise) for petrol and diesel but effectively the overall excise burden is unchanged". States are also able to levy variable taxes as a result of which prices vary across states.

Other reports by TheSundaySentinel

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