Govt rules out excise duty cut on petrol, diesel

The government will not cut excise duty on petrol and diesel even as fuel prices hit a new high on Tuesday.

Top sources in the finance ministry said any excise duty cut at a time when rupee is falling and making the import of crude oil costlier may put government finances off the gear.

“There is a risk of current account deficit overshooting its target. The government can hardly do anything at the moment,” the sources said and hoped the prices of crude oil should come down and rupee should also stabilise.

The prices of petrol and diesel hit a fresh high on Tuesday. Petrol rose to a record Rs 79.31 in Delhi while diesel jumped to Rs 71.54 a litre, an all-time high. The government has, however, shunned the plan to bring petrol and diesel under the Goods and Services Tax (GST) for now, saying states are opposed to the move.

The Opposition Congress, however, demanded that the two fuels be brought under GST immediately.

“The Congress demands that petrol and diesel be brought under GST immediately. The Centre blaming the states is a spurious argument. The BJP forgets its boast that it is ruling in 19 states. The Centre and states must act together and bring petrol and diesel under GST,” senior Congress leader P Chidambaram said.

He said the rise in fuel prices is due to excessive taxation on them.

“The relentless rise in prices of petrol and diesel is not inevitable. Because, the price is built up by excessive tax on them. If taxes are cut, prices will decline significantly,” he said in a series of tweets.

Fuel prices have been rising despite the import bill for crude oil currently being roughly half of what it used to be before 2014. Against an average crude import bill of $168 billion prior to 2014, the government is currently paying only about $86 billion.

Former finance minister Yashwant Sinha, too, gave a call for the Opposition to hit the streets in protest.

On Monday, senior BJP leader Subramanian Swamy had spoken against the hike in petrol prices, saying it was an “exploitation “ of common man.