No reverting to subsidy in fuel, may cut excise if price pinches’
The government may pare excise duty on motor fuel if price rise “pinches hard”, but will not revert to the subsidy regime, oil minister Dharmendra Pradhan said on Monday .
There will be no subsidy regime in petrol and diesel…Petrol price was deregulated in June 2010 and diesel in October 2014 and the same will continue… subsidies are anti-poor. Subsidy should be given only to needy persons and not to people who can afford,” Pradhan told reporters.
Rising global oil prices have led to petrol prices being hiked for the fourth time since December and diesel price has been raised thrice. Petrol price was hiked by Rs 0.42 and diesel by Rs 1.03 a litre, excluding local levies, from Monday .
Petrol price has risen by Rs 5.21 per litre and diesel Rs 4.45 since December. Asked if the government will cut excise duty, Pradhan said no developed country had passed on the entire slump in global oil prices that began in second half of 2014 to take crude to its lowest level in more than a decade.
Even oil producing nations like Saudi Arabia and UAE used it as an opportunity to cut subsidies, he said, adding that India raised excise duty to take away part of the gain arising from slump in global oil prices then. “We passed on 50% of the benefit of oil prices slump to consumers and the rest 50% we mopped up by raising excise duty . This additional revenue was used to fund infrastructure and social projects,” Pradhan said.