New Delhi: The government on Thursday 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 on Wednesday 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.
“Govt has decided to increase basic excise duty on petrol & diesel by Rs 2/litre for infrastructure development, esp building 15000 km of road,†tweeted Dharmendra Pradhan, Minister of State (Independent Charge), Petroleum & Natural Gas.
“However, retail price of Petrol & Diesel will remain unchanged allover India despite additional excise duty of Rs 2/litre from midnight today,†he added.
Together with Rs 1.50 a litre excise duty hike effected on both products from November 12 and Rs 2.25 per litre increase in duty on petrol and Re 1 on diesel from December 2, the government will mop up about Rs 17,000 crore this fiscal to contain fiscal deficit.
“Allocation of these resources to the road sector will also spur economic activity and employment generation arising from the road construction sector,” an official statement said.