Excise Cut Softens Impact of Rising Fuel Prices, Hike Limited to 4%

NEW DELHI: The government has ensured that the price hike in petrol and diesel has been restricted to 4.4 per cent, the lowest among major economies, while that of domestic liquefied petroleum gas has remained constant, by reducing excise duty and asking the oil companies to absorb the losses due to the cost of imported crude soaring past $100 a barrel.

Public sector oil companies have absorbed under-recoveries of Rs 24,500 crore on petrol and diesel to keep pump prices on hold, before resorting to a price hike of Rs 3.91 per litre in the two fuels in two instalments, according to official sources. The government has absorbed Rs 30,000 crore by way of loss in revenue due to the reduction of excise duty on petrol and diesel, while the oil companies have lost Rs 24,500 crore on the two fuels and another Rs 40,000 crore on holding the price of liquefied petroleum gas for domestic consumers, a senior official told IANS.

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