Govt gives up Rs 14,000 crore in tax revenue after excise duty cut on petrol and diesel: Petroleum Ministry
New Delhi, May 25
The Centre has forgone nearly Rs 14,000 crore in tax revenue after reducing excise duty on petrol and diesel to shield consumers from rising fuel prices triggered by the West Asia crisis, said Sujata Sharma, Joint Secretary in the Petroleum Ministry, on Monday.
The government had cut central excise duty by Rs 10 per litre on both petrol and diesel on March 27, following a sharp rise in global crude oil prices due to tensions in West Asia.
"West Asia crisis, our imports are affected, like 40% of our crude import, 90% of our LPG import and almost 65% of our natural gas import, but all efforts have been made to ensure the smooth supplies of petroleum products within the country," Sujata Sharma said.
She said the government's duty reduction has come at a high fiscal cost, even as oil marketing companies (OMCs) continue to face losses.
According to Sharma, OMCs are still incurring losses of around Rs 600 crore per day despite recent increases in fuel prices.
She added that domestic LPG production has reached 50,000 tonnes per day as authorities work to maintain uninterrupted fuel supplies.
Addressing concerns over panic buying in some states, Sharma said fuel supply is being closely monitored.
"LPG retail outlets are being seen in some states as panic buying, like some districts of Gujarat, Maharashtra and UP. The main reason behind this is that there is some agricultural demand. Apart from this, there is some bulk demand," she said.
"On the OMC level, all the retail outlets are being monitored closely. Supply situation is being monitored closely, so that if the intermittent dryouts are somewhere, then they will be addressed," Sharma added.
She said petrol and diesel stocks at retail outlets have been replenished to avoid shortages.
"Stocks, petrol and diesel, all the retail outlets have been replenished," Sharma said.
On piped natural gas (PNG) expansion, Sharma said 7.99 lakh PNG connections have been gasified, while infrastructure is ready for another 2.87 lakh connections.
She also said LPG deliveries in the past four days have exceeded bookings.
— ANI
Reader Comments
But OMCs are still losing Rs 600 crore daily! That's alarming. Are we just kicking the can down the road? Eventually, we'll pay more in some other form. The West Asia crisis is no joke - 40% crude imports affected is scary.
As an expat living in Mumbai, I see the panic buying in Gujarat and UP mentioned. It's frustrating to see people hoarding LPG when supply is being monitored. The government should enforce stricter limits during crises.
Good that LPG production is 50,000 tonnes per day now, but we still need to reduce import dependence. 90% LPG import is too risky! Also, why did they wait until March to cut excise duty? The West Asia crisis started much earlier.
I appreciate the price cut, but Rs 14,000 crore forgone could have been used for infrastructure or healthcare. Also, why are OMCs still losing money? Something doesn't add up. Need more transparency in fuel pricing.
The panic buying is real in my village in UP! People are worried about shortages. At least the government is monitoring retail outlets. But we need long-term solutions - more domestic production and renewable energy investment. 🌍
Interesting that LPG deliveries exceed bookings in some areas. Maybe the crisis is being managed better than people think.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.