OMCs cut diesel, petrol prices; excise duty hiked

Written By Unknown on Sabtu, 17 Januari 2015 | 21.03

Moneycontrol Bureau

In a major twist, the government on Friday cut petrol and diesel prices, just an hour after going ahead with an excise duty hike.

The oil marketing companies have slashed diesel and petrol prices by Rs 2.25 and Rs 2.42 per litre, respectively. However, the excise duty on the products was hiked by Rs 2 per litre.

This is the ninth straight reduction in petrol prices since August, and fifth in diesel since October. New rates will be effective midnight tonight, Indian Oil Corp said.

Meanwhile, this is the fourth hike in excise duty since November and cumulatively customers have been denied the benefit of Rs 7.75 per litre reduction in petrol and Rs 6.50 a litre cut in diesel rates that was warranted due to the slump in oil price to USD 46 per barrel.

According to Finance Ministry notification, the excise duty on unbranded petrol has been hiked to Rs 8.95 per litre, branded petrol to Rs 10.10, unbranded diesel to Rs 7.96 and branded diesel to Rs 10.25 per litre.

The four excise duty hikes will result in about Rs 20,000 crore in additional revenue this fiscal and will help the government meet its fiscal deficit target of 4.1 percent of the GDP. Petrol and diesel prices were last cut on December 16 by Rs 2 per litre each.

Reacting to the move, RS Sharma, Former CMD, ONGC , said the government should pass on some benefits to consumers as well.

RK Singh, Former CMD, BPCL , said there could still be some over-recovery by OMCs but one should not forget that oil companies need to have their own fiscal conditions sound so that they can invest, and service large projects in the future.

"If they have suffered in the past and they are making little more money now, what is wrong in that? We should allow them to do so and at the same time not burden the consumer. Here consumer has had the benefit of reduced price on 10-12 occasions. Don't forget that oil companies are government companies, not private hoarders that we should doubt their intentions," he said.

SK Joshi, Former Director, BPCL , feels the question of cushion comes later as when the prices become volatile, dropping sharply, OMCs have to undertake huge inventory loss.

"So overall when the oil companies consider the exact pricing they have to consider not only the immediate drop but along with that OMCs have to hold large inventory and the sudden inventory value loss takes place. So one should not go by arithmetical working of just what drop has happened and whether the entire drop has to be passed on to the consumers. It's a holistic decision taking into account the inventory loss and then the oil companies will not be profiteering from this kind of drop. This much I am confident," he said.

Kirit Parikh, Former Member, Planning Commission, said when he has submitted the report on diesel deregulation mentioning that duties were high, the government at that time had subsequently reduced it as international prices were high.

However, the global prices have come down now dramatically and if one takes the financial year, there is still lot of under-recoveries to be covered up.

"It seems fair to me if the government raises the excise duty now to recover some of the under-recoveries, losses that it had suffered earlier. Of course we also have to recognize that this doesn't hurt oil marketing companies because if they had not raised it, oil marketing companies would have been required to lower the price for the consumer. So, it is the consumers' loss, not the OMCs' loss. They would not have gained anything," he said.

He said that instead of lowering the price for consumers, the government is raising the excise duty. "Considering the fact that we should also control the consumption of petroleum and diesel products in the country, I would support this move and I don't think it is particularly bad."

Posted by Kankana Roy Choudhury

(With inputs from PTI)


Anda sedang membaca artikel tentang

OMCs cut diesel, petrol prices; excise duty hiked

Dengan url

http://kebugaranhidup.blogspot.com/2015/01/omcs-cut-diesel-petrol-prices-excise_17.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

OMCs cut diesel, petrol prices; excise duty hiked

namun jangan lupa untuk meletakkan link

OMCs cut diesel, petrol prices; excise duty hiked

sebagai sumbernya

0 komentar:

Posting Komentar

techieblogger.com Techie Blogger Techie Blogger