Government rules out slashing taxes on petrol, diesel

New Delhi : Oil Minister Dharmendra Pradhan on Wednesday ruled out cutting taxes on petrol and diesel to cushion the impact of rising international oil prices that has led to petrol rates increasing by over Rs6 per litre since the beginning of July.

State-owned oil companies in June dumped the 15-year old practice of revising rates on 1st and 16th of every month and instead adopted a dynamic daily price revision to instantly reflect changes in cost. Rates during the first fortnight dropped but have since July 3 been on the rise.

The Centre had in November 2015 and January 2016 raised excise duty on petrol and diesel five times to take away gains arising from plummeting international oil prices

While petrol prices have increased by Rs 6.08 to reach Rs 69.12 a litre in Delhi, the highest since August 2014, diesel rates have risen by Rs 3.65 to Rs 57.01.

“That situation has not come where we should relook at tax structure,” Pradhan told reporters on the sidelines of an industry event here. The rate changes are being done on a transparent basis and city-wise prices are available through SMS, he said adding the daily price change model best reflects the happenings in the market. Asked if the government is considering cutting excise duty on petrol and diesel, he said, “not yet. When situation arises, we will see.”

The government had in November 2015 and January 2016 raised excise duty on petrol and diesel five times to take away gains arising from plummeting international oil prices. Excise duty on petrol was hiked by Rs 4.02 a litre and that on diesel by Rs 6.97. Prior to that, the government had in four instalments raised the excise duty on petrol and diesel between November 2014 and January 2015 to take away gains arising from fall in international oil prices.