Industry & Economy
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Petroleum
Cess on petrol, diesel will cancel out gains on refining margins: Crisil
Our Bureau
Mumbai
,
March 3
INDIAN crude oil refiners are expected to make an average $6 (Rs 260) on every barrel processed during 2005-06, according to ratings agency Crisil. High refining margins will, however, be offset by a loss of close to Rs 2,900 crore on higher excise duties on petrol and diesel in 2005-06.
"As a result, we may not see major changes in prices," said Mr G. Ravishankar, Director, Crisil. He told newspersons that the realigning of cooking gas and kerosene subsidies has removed an irregularity from the earlier tax system.
"The Government earlier charged companies a 5 per cent Customs duty and then repaid them the same amount by way of subsidies. This anomaly has now been done away with," Mr Ravishankar told newspersons during a Budget discussion.
Among the petrochemical companies, the integrated players, including Reliance Industries, GAIL (India) and Haldia Petrochemicals, will be affected by lower duty differentiation between products and raw materials, he said. He did not mention the extent of the hit.
Margins on petrochemical making units are expected to decline in 2005-06. "We believe margins peaked in 2004," he said.
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