No respite for consumers: Govt may not lower excise duty on auto fuel

The government is not likely to lower the excise duty on petrol and diesel despite the retail prices hitting new highs.

Speaking at an event to mark the roll out of BS VI grade fuels in Delhi–National Capital Territory, Minister for Petroleum and Natural Gas, Dharmendra Pradhan, said, “Petrol and diesel prices are international commodities whose prices are aligned to global variations. The government recently lowered the excise duty and this benefit was passed on to the consumers.”

In October last year, the Centre had cut excise duty by ₹2 a litre when petrol price reached ₹70.88 a litre and diesel ₹59.14 in Delhi. But prices have been on a steady rise and petrol now costs ₹73.83 a litre while diesel costs ₹64.69 a litre in the Capital.

This is the highest price ever at which diesel has been sold in Delhi. For petrol, the current price is the second highest after that of ₹76.06/litre reached in September 14, 2013.

Currently, the Centre charges excise duty of ₹15.33/litre on diesel and ₹19.48/litre on petrol. The Delhi state government charges a Value Added Tax of ₹15.70/litre on petrol and ₹9.53/litre VAT on diesel. Pradhan said that in addition to revenue from VAT, the States also get half of the revenue from excise collections.

Pradhan said that the Goods and Services Tax Council has started moving positively in the direction of including petrol and diesel under GST. He said, “The inclusion under GST will lower the burden on consumers. I appeal to the Council that these products be included in the GST framework. Consumers should get the products at a rational price.”