The government has slashed the windfall profit tax levied on domestically-produced crude oil as well as on export of diesel and ATF following a drop in global oil prices, according to an official order. The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) has been cut steeply to Rs 1,700 per tonne from Rs 4,900, the order dated December 15 said. Crude oil pumped out of the ground is refined and converted into fuel like petrol, diesel and aviation turbine fuel (ATF).
Public sector oil companies have demanded a Rs 1.60 per litre increase in diesel price and Rs 0.65 per litre hike in petrol prices in step with the surge in international oil prices.
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State-owned oil firms are likely to announce reduction in rates, made possible because of softening in international oil rates, this evening, government and industry sources said.
The change from wholesale to retail inflation as an anchor means that the weightage of diesel in inflation has decreased
The government had last week hiked diesel prices by Rs 5.63 a litre and capped the number of subsidised LPG cylinders to six per family a year.
The government on Friday slapped an export tax on petrol, diesel and jet fuel (ATF) while also joining nations like the UK in imposing a windfall tax on crude oil produced locally. A Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel is effective from July 1, finance ministry notifications showed. Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically.
Fuel rates were last revised on February 1 when petrol price was cut by a marginal 4 paise a litre.
A looming global shortage of diesel in Europe presents India with more than one opportunity to profit from strong margins. A shortage of the fuel, a key contributor to inflation, has been exacerbated by the conflict in Ukraine, and western sanctions on Russian fuel supplies. The slowdown in natural gas supply means the West needs diesel to heat their homes this winter.
Oil companies on Wednesday slashed petrol and diesel prices by Rs 2, with effect from midnight tonight.
Under-recovery or the difference between retail price and its imported cost on diesel was 8 paisa per litre in the first half of September.
India is back on the diplomatic table pushing oil producing countries to raise production in a bid to cool down runaway oil prices. Brent crude oil prices traded above $90 a barrel, on Thursday, for the first time since 2014. Brent is the most popular marker for crude oil trade. It is used as a benchmark for two-thirds of the world's internationally traded crude oil.
Petrol and diesel prices across the country will increase by 9-13 paise a litre with effect from Tuesday midnight, after the government decided to increase the commission to petrol pump dealers.
Prices have declined 18 per cent this year.
Since May 1, the dynamic fuel pricing model has been applied on a pilot basis in 5 cities
India's ambitious programme to cut oil import bill by mixing a small percentage of non-edible oil in diesel has encountered an unexpected problem.
The protesters led by the state unit Bharatiya Janata Party chief C P Thakur burnt the effigy of the prime minister at the busy Dak Bungalow roundabout.
Petrol price on Monday neared Rs 100-a-litre mark in the national capital after the rate was hiked yet again. Petrol price was increased by 35 paise per litre while there was no change in diesel rates, according to a price notification from state-owned fuel retailers. In Delhi, the petrol price soared to Rs 99.86 per litre. Diesel rates were unchanged at Rs 89.36.
Petrol and diesel prices will not be changed this fortnight, said a communiqué on Tuesday.
A new formula for pricing natural gas in the domestic market was determined; the decontrol of diesel prices was announced; and the scheme that directly transferred subsidies to bank accounts of users of liquefied petroleum gas (LPG) cylinders was modified and relaunched.
Plans to increase price progressively.
A Rs 3-4 a litre hike in the price of petrol, which had been freed from government control last June, is also on the cards immediately after polling in the last phase of Assembly elections is completed on May 10.
The domestic car market, which sees sales of almost one diesel car for every petrol car sold, will see demand for diesel-powered cars to hit the roof.
Petrol price was on Friday cut by Rs 2.42 per litre and diesel by Rs 2.25 a litre after an excise duty hike limited the benefit of global crude prices slumping to six-year low.
After premium petrol, the price of normal petrol has also crossed Rs 100 per litre in Rajasthan's Sriganganagar district.
With deregulation in diesel prices, this variant does not make sense.
Move to be aimed at reducing subsidies on the fuel.
Petrol price on Thursday crossed the Rs 100-a-litre mark in Thane district of Maharashtra, while it was hovering a tad below that level in Mumbai, after fuel prices were raised again.
Petrol, that had in April/May witnessed 11-12 per cent growth in consumption, in fact saw a six per cent fall in demand at 8,02,500 tons in June, oil ministry officials said.
She charged the government with profiteering at the expense of the people, saying its duty was to help them in times of crisis and not make profits out of their hard-earned money.
From April 2020, manufacturers will have to hike prices of diesel cars sharply to accommodate the costs incurred in the transition to BS VI emission norms, and widening the gap between a diesel and petrol car.
India's export of fuels like diesel to the European Union jumped 58 per cent in the first three quarters of 2024, with a bulk of them likely coming from refining discounted Russian oil, according to a monthly tracker report. The EU/G7 countries in December 2022 introduced a price cap and an embargo on the imports of Russian crude oil in a bid to cripple Kremlin's revenue and create a vacuum in its funding for the invasion of Ukraine.
Jet fuel prices on Thursday were hiked by the steepest ever 16 per cent to catapult rates to an all-time high in step with hardening international oil rates.
Reserve Bank Governor Shaktikanta Das on Wednesday ruled out upside risks to the 5.3 per cent inflation forecast for the current fiscal, saying the recent cut in excise duty on diesel and petrol as well as better management of supply-side issues on the food front have contained inflationary expectations. These measures are significantly positive for inflation management, he said. After months of calls for reducing taxes on fuels, the government, last week, cut the excise duty on diesel and petrol by Rs 10 and Rs 5 per litre, respectively.
The price of petrol is expected to come down to Rs 84.71 a litre and diesel to Rs 77.98
The wide-ranging sanctions imposed by the US on the Russian oil sector have started to dent near-term oil flows to India with state-owned Bharat Petroleum Corporation Ltd (BPCL) saying not enough cargoes are available for March.
The auto industry, however, said any such step to impose additional taxes on the sector will not 'make sense'.
Dynamics of auto business will change if the government ends diesel subsidy to passenger vehicles.
Profit on sale of diesel swelled to Rs 1.90 per litre as oil ministry awaits return of Prime Minister Narendra Modi to cut rates.
International crude oil prices may have eased but the government has no immediate plans to pass on the benefit to the consumers, as it wants to wait for the prices to stabilise further.
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