Finance

Petrol, diesel prices to remain same after excise duty cut: Know why

Petrol, diesel prices to remain same after excise duty cut: Know why

On Tuesday, prices of diesel in Delhi, Kolkata and Chennai touched record highs of Rs 63.01 per litre, 65.67 and Rs 66.44 respectively. And also the diesel price has remained unchanged in Mumbai which is Rs 68.27 per litre.

There is also an expectation that common man may get some relief in income tax by way of a raise in the exemption limit.

The introduction of Road and Infrastructure Cess has been made to partly finance the expenditure of Ministry of Road Transport and Highways.

The 5 per cent road and infrastructure cess on ethanol-blended petrol up to 10 per cent and bio-diesel up to 20 per cent has been abolished.

"The budget has changed the tax structure for MS and HSD with more taxes aligned towards Road and Infrastructure cess and less on excise duty, so that adequate funds will be available for the road building programme, without impacting the consumer prices", K. Ravichandran, Senior Vice President and Group head at ICRA said.




The previous coresponding highs in these cities were Rs 76.14 (Kolkata, August 2014), Rs 81.75 (Mumbai, July 2014) and Rs 75.78 (Chennai, August 2014).

FM Jaitley's announced triggered speculation about prices of petrol and diesel coming down soon. "Hope Petroleum will be included in GST, will help absorb impact of high crude prices", Oil Minister Dharmendra Pradhan said in a tweet today. According to data from the website of the Indian Oil Corporation, petrol price went up by Rs 2.95 in Delhi last month. On diesel as well, the excise duty has been cut by Rs 2 to reach Rs 6.33 per litre.

Opposition was quick to target the Finance Minister, accusing him of deceiving the public by his announcement of excise duty cuts. The Centre had however, increased excise duty earlier when the global crude prices had plummeted in order to gain from the dip. Prices in global markets have been fluctuating since the last few weeks and are being reflected in domestic rates.

Replying to queries from reporters, on whether the state government would reciprocate by cutting sales tax, Siddaramaiah said, "The cost of crude oil has come down from $110 per barrel a few years back to $43".


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