Petrol and diesel prices may increase. Finance Minister Pranab Mukherjee has not reduced the customs and excise duty to combat the world prices of global crude oil – they have touched a two-year high of $110 per barrel.
In his budget, Mr Mukherjee has left the customs duty on crude oil unchanged at 5 per cent. The duty on petrol and diesel remains 7.5 per cent. Excise duty on petrol will remain at Rs. 14.35 a litre and diesel at Rs. 4.60 per litre.
The Finance Minister did not refer in his speech to rising crude oil prices.
Petrol prices were deregulated last June. The state-owned IOC, BPCL and HPCL are currently losing about Rs. 2.25 a litre on petrol.
Oil firms were waiting to see if the Finance Minister would reduce customs and excise duties before deciding on whether they should increase their prices.
Oil Minister Jaipal Reddy had last week stated he would discuss a possible hike in petrol prices with an Empowered Group of Ministers (EGoM) headed by Mukherjee after the Budget.
The timing of the hike remains to be seen as the government may be jittery of raising prices when Parliament is in session.
At current prices, oil firms are projected to lose Rs. 76,559 crore in the current fiscal, half of which is meant to be compensated by the government.
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