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Hike in excise duty on petrol and diesel likely
Posted on: 23/Jan/2016 4:47:01 PM
The excise duty on petrol and diesel were hiked by Rs 0.75 and Rs 2 respectively. There is a heavy downfall of oil price unlike the past 12 years. It has reached USD 29 per barrel the reason being weak Chinese economy and global slowdown.
The government is likely to impose yet another hike in excise duty of petrol and diesel well before the budget for the upcoming financial year. This is intended to increase revenue and stay focused on fiscal deficit target for the ongoing financial year. Official source says there is dip in crude oil price leaving room for increasing excise duty on these fuels. This will be of help in maintaining 3.9 percent of fiscal deficit target in the present fiscal.
It is crucial to maintain the fiscal target, and all the required efforts for the same will be taken, sources add. It is to be noted that the excise duty on petrol and diesel were raised four times; this helps in adding Rs 14,000 crore in the ongoing fiscal.
There was a hike of Rs 0.75 per litre and Rs 2 per litre last week. This is the second time such a hike is made in the last two weeks. This mopped up about Rs 3700 crore in additional revenue. There is already a 12-year low in the oil prices and has reached USD 29 per barrel.
Apart from this, sanctions on Iran also serves as one more reason for the downward pressure on dip in crude oil price. With higher realization from further excise duty hike, it will be possible for the government to upkeep the fiscal deficit at 3.9 percent in the present fiscal year that ends in March.
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