The government is not considering cutting excise duty on petrol and diesel yet as rates have not touched levels that could trigger such an action, said Economic Affairs Secretary Subhash Chandra Garg.
State oil firms have not revised petrol and diesel price for almost a week now. This after petrol price hit a 55-month high of Rs 74.63 a litre and diesel rates climbed to a record high of Rs 65.93.
In an interview to PTI, Garg said oil prices can impact the government’s fiscal maths if they result in a spike in rates of domestic cooking gas (LPG) - the only commodity that is subsidised now.
“Otherwise there is no direct subsidy any longer,” he said. “Indirect subsidy/impact comes, if crude oil prices reach a certain level (and) there might by some rethink about excise duty etc. That’s not happened so far.”
Without indicating the level of oil prices that could trigger an excise duty cut, he said, “If the level (of prices now) does not go up, there is no reason (for excise duty cut).”
Every rupee cut in excise duty on petrol and diesel will result in a revenue loss of Rs 13,000 crore.
Asked if there is any thinking of cutting excise duty or asking PSU oil firms to hold rates till elections in Karnataka, he said, “We have not seen anything (on it).”
The central government levies Rs 19.48 a litre of excise duty on petrol and Rs 15.33 per litre on diesel. State sales tax or VAT vary from state to state. In Delhi, VAT on petrol is Rs 15.84 and Rs 9.68 a litre on diesel.