Cut taxes on crude, Deora tells Pranab

Minister of petroleum and natural gas Murli Deora today sought the abolition of customs duty on crude oil and a cut in excise duty on diesel to avoid the need for more retail-level fuel price hikes in view of spiralling global oil rates.

''We are demanding a rollback of the 5 per cent customs duty that finance minister Pranab Mukherjee had imposed on crude oil in his last budget. Also, the Re1 per litre increase in excise duty on petrol and diesel (also done in budget for 2010-11) needs to be reversed,'' Deora told reporters in New Delhi.

Mukherjee had on 26 February 2010, imposed a 5 per cent import duty on crude oil and hiked the duty on petrol and diesel from 2.5 per cent to 7.5 per cent. He also hiked excise duty on petrol and diesel by Re1 a litre and Rs4.60 per litre respectively. The move led to an immediate hike of Rs2.71 a litre for petrol price and Rs2.55 per litre for diesel.

''Crude oil prices have touched $92 per barrel and there are some forecasts that it will go to $100 a barrel soon. There is definitely a case for rolling back the duties the finance minister had imposed in his last budget,'' Deora said.

The three oil marketing companies, Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum – all state-owned - are losing Rs1.22 per litre on petrol sales despite last week's Rs2.50-Rs2.54 a litre price hike, he said, adding that on diesel the companies are losing nearly Rs7 per litre.

Besides, the three firms are losing about Rs290 crore a day in revenues on selling diesel, LPG (cooking gas) and kerosene below cost.