New Delhi: Oil Minister Murli Deora on Wednesday demanded abolition of customs duty on crude oil and cut in excise duty on diesel to avoid more fuel price hikes that have become necessary because of spiralling global oil rates.
"We are demanding rollback of 5 percent customs duty that Finance Minister Pranab Mukherjee had imposed on crude oil in his last Budget. Also, the Re one per litre increase in excise duty on petrol and diesel (also done in Budget for 2010-11) needs to be reversed," Deora told reporters here.
Mukherjee had on February 26, 2010, imposed 5 percent import duty on crude oil and hiked the same on petrol and diesel from 2.5 percent to 7.5 per cent. He also hiked excise duty on petrol and diesel by Re one a litre to Rs 14.35 and Rs 4.60 per litre, respectively.
The twin move had led to a Rs 2.71 a litre hike in petrol price and Rs 2.55 per litre increase in diesel rates then.
"Crude oil prices have touched USD 92 per barrel and there are some forecasts that it will go to USD 100 a barrel soon. There is definitely a case for rolling back the duties Finance Minister had imposed in his last budget," Deora said.
Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are losing Rs 1.22 per litre on petrol sales despite last week's Rs 2.50-2.54 a litre price hike, he said adding that on diesel the companies are losing nearly Rs 7 per litre.
The three firms are losing about Rs 290 crore a day in revenues on selling diesel, LPG and kerosene below cost.
Besides petrol and diesel, they are losing Rs 19.60 a litre on kerosene and Rs 366.28 per 14.2-kg cylinder.
The three firms are projected to lose Rs 73,600 crore in revenues during the 2010-11 financial year, 55 per cent of which Deora wants the Finance Ministry to meet by way of cash from the central Budget.
Deora said he had on January 8 met Mukherjee to seek immediate release of Rs 10,000 crore in interim compensation to state oil companies.
So far, the Finance Ministry has committed to make up only one-third of the revenue losses from the Budget.
"The Finance Minister has sanctioned Rs 13,000 crore to cover part of under-recoveries in first half of the current fiscal. I requested him to release another Rs 10,000 crore for third quarter under-recoveries immediately for Q3," he said.
Without government subsidy, HPCL and BPCL are sure to report net loss in the October-December quarter and IOC too may end the three months in red.
The government had in 2008-09 given Rs 71,292 crore, out of the Rs 103,292 crore total revenue loss on fuel sales. "This was 69 percent of the total under-recovery. During the current fiscal, which has also seen hardening of crude prices, we are seeking just 55 percent," Deora said.