LPG dearer by Rs 50 per cylinder
New Delhi: In a steep hike, the government on Friday increased diesel price by Rs 3 per litre, domestic LPG by Rs 50 per cylinder and kerosene by Rs 2 per litre and slashed customs and excise duties on crude oil and products, sacrificing Rs 49,000 crores in revenues.
The increase, decided at a meeting of the Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee, is exclusive of local sales tax, Oil Minister S Jaipal Reddy told reporters here.
Diesel price in Delhi will be hiked by Rs 3.40 per litre to Rs 41.15 a litre with effect from midnight. Rates will vary at cities due to differential rates of VAT/sales tax.
Besides the price hike, the EGoM decided to abolish the 5 per cent customs or import duty on crude oil, and slashed the same on diesel and petrol by 2.5 per cent from 7.5 per cent. Also, excise duty on diesel was cut from Rs 4.60 per litre to Rs 2 a litre.
Reddy described the hikes, which had become necessary in view of a rally in international crude oil price, as “very modest and minimal”.
The decision to cut customs duty on petrol also meant that the Rs 1.98 per litre hike needed to level retail prices with their cost would no longer be required, he said.
The reduction in excise duty on diesel would lead to a revenue loss of Rs 23,000 crore this fiscal, while in the customs duty cut the government will forego Rs 26,000 crore. The price hike would help the oil companies limit their revenue loss by Rs 21,000 crore, but they still would end the fiscal with about Rs 1,20,000 crore of revenue loss.
The hike in price of diesel would add 0.3-0.4 per cent increase in inflation. (PTI)