No Change in Retail Price :Excise duty on petrol, diesel hiked
The government recently raised excise duty on petrol and
diesel by Rs 2 per litre each but retail pump rates will not be increased.
The third excise duty hike since November will help raise
additional Rs 6,000 crore during remaining three months of the current fiscal
as the government took advantage of a slump in global oil prices to five-year
low to shore up revenue without stoking inflation.
The oil firms had skipped cutting rates of the two fuels
that had become necessary as international oil rates plunged to their lowest
level since May 2009.
The excise duty hike has now been set off against the
reduction in rates that was due because of slide in oil prices.
The slump in global oil rates had warranted a price cut of
Rs 3.22 per litre in petrol and about Rs 3 in diesel and even after adjusting
the excise increase; oil firms will have a neat margin of over Re 1 per litre.
Together with Rs 1.50 a litre excise duty hike effected on
both products from 12th November and Rs 2.25 per litre increase in duty on
petrol and Re 1 on diesel from 2nd December, the government will mop up about
Rs 17,000 crore this fiscal to contain fiscal deficit.
Excise duty on normal or unbranded petrol has been hiked
from Rs 4.95 per litre to Rs 6.95 a litre and on unbranded diesel from Rs 3.96
to Rs 5.96 a litre.
The total incidence of excise on petrol, after including
special excise duty and road cess, will be Rs 14.95 and that on diesel will be
Rs 7.96 a litre.
Similarly, excise duty on branded petrol has been raised
from Rs 6.10 to Rs 8.10 a litre and on branded diesel from Rs 6.25 to Rs 8.25
These increased rates of basic excise duty will be effective
from January 2, 2015 (that is from midnight of 1st and 2nd January, 2015).