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Govt to mop up Rs 20 bn from excise hike on petro products

The government is likely to raise shortly excise duties on some petroleum products as part of efforts to mop up an additional upto Rs 20 billion during January-March 2002.

An announcement hiking the excise duty would be made in a matter of days, sources in the finance ministry said on Wednesday, but the revenue secretary S Narayan remained non-committal on the issue.

Narayan response was 'no' when asked about the government's proposed move for raising the tariff rate following a Cabinet decision that gave the finance ministry emergency powers to increase excise duty without waiting for the Budget 2002-03.

"We would like to mop up Rs 15-20 billion during the remaining part of the current fiscal by raising duties. However, consumers will not be affected by the hike in duty rates for petro products," official sources said.

The excise duty hike could be as high as 100 per cent in certain products.

At present, excise duty on kerosene and LPG is 8 per cent each while that on diesel is 16 per cent. Excise duty on petrol currently is 32 per cent.

While the oil companies would pay the increased excise duty, the same would not be charged from the consumers, sources said, adding the loss, if any, to the oil company would be credited to their outstanding with the oil pool account.

Oil pool account, a complex mechanism of subsidising mass consumed kerosene and cooking gas, currently has a net deficit of about Rs 120 billion.

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