Petroleum products prices hiked
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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