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June 1, 1998

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Petroleum products prices hiked

Send this story to a friend Finance Minister Yashwant Sinha while presenting the Budget for 1998-99 in the Lok Sabha today said that the government was committed to providing tax code which was consistent with dismantling of administered pricing mechanism of petroleum products in a phased manner.

By 2001, the import duty on crude has to be reduced from the current level of 27 per cent to not more than five per cent. Similarly, the import duty on downstream products like furnace oil, high-speed diesel oil, motor spirit and aviation turbine fuel has also to be reduced to the level of 10 per cent to 15 per cent. These measures are to ensure an effective protection not exceeding 20 per cent for downsteam industry by suitable differential and calibration of import duty structure.

The finance minister accordingly proposed reducing the customs duty on crude from a total of 27 per cent to 22 per cent. Excise duty on motor spirit is proposed to be increased from 20 to 35 per cent. He also said that the customs duty will be imposed on kerosene imported for parallel marketing at 32 per cent, including a special duty of two per cent.

Meanwhile, the cost of petrol in the four metropolitan cities of Bombay, Calcutta, Delhi and Madras will range between Rs 26.77 per litre to Rs 31.36, subject to local taxes with effect from the midnight of June 1, 2.

Thus, the price will be Rs 26.77 per litre in Delhi, Rs 27.59 in Calcutta, Rs 30.21 in Bombay and Rs 31.36 in Madras.

This follows the budgetary increase of Re 1 per litre in the price of petrol and an increase from 22 to 35 per cent in the excise duty.

According to the petroleum ministry, the actual prices will be subject to sales tax and local levies.

Sources in the ministry pointed out that the additional revenue mopped up by this increase will go to the corpus fund of the National Highways Authority of India.

Budget '98

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