Lok Sabha Question No. 1168 (UNSTARRED), answered on 2017-12-22
Subject: Excise Duty on Petrol and Diesel
Ministry: FINANCE
Asked by: JAYAKUMAR JAYAVARDHAN, P.R. SUNDARAM, HEENA VIJAYKUMAR GAVIT, DHANANJAY BHIMRAO MAHADIK, RAJENDRA AGRAWAL, SUPRIYA SADANAND SULE

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO. 1168

## TO BE ANSWERED ON FRIDAY THE 22 TH   DECEMBER, 2017 PAUSHA 01,1939 (SAKA)

## EXCISE DUTY ON PETROL AND DIESEL

1168. DR. J. JAYAVARDHAN:

SHRI P.R. SUNDARAM:

DR. HEENA VIJAYKUMAR GAVIT:

SHRI DHANANJAY MAHADIK:

SHRI RAJENDRA AGRAWAL:

SHRIMATI SUPRIYA SULE:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has slashed excise duty on petrol and diesel;
- (b) if so, the details thereof and the objective behind the move;
- (c) the estimated revenue loss on account of this reduction in excise duty;
- (d) whether the Government have urged the States to cut vat on fuel in order to provide further relief to customers and if so, the details thereof; and
- (e) the other steps taken by the Government to bring down the prices of petrol and diesel at par with current price of petrol and diesel in the international market?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

(a Yes Madam,

- (b): The Government has reduced Central Excise duty on petrol and diesel by Rs 2 per litre with effect from 04.10.2017 so as to give relief to farmers and consumers.
- (c): Revenue loss on account of this reduction in excise duty is about Rs. 26,000 crore in a full financial year, and about Rs. 13,000 crore during the remaining part of current financial year i.e. 2017-18.

(d): Subsequent to the reduction in Central Excise  duty, the Finance Minister had written letters to Chief Ministers of States urging them to reduce VAT on petrol and diesel so as to give relief to farmers and consumers.

Accordingly,  three  State  Governments,  namely,  Gujarat,  Maharashtra  and Madhya Pradesh and one Union Territory (Chandigarh) have reduced the VAT on Petrol and Diesel.

(e): The  prices  of  petrol  and  diesel  have  been  made  market  determined  by  the Government effectively from 26 th  June, 2010 and 19 th  October, 2014 respectively and since  then  their  prices  are  being  decided  by  the  Public  Sector  Oil  Marketing Companies (OMCs) in line with the changes in the international market prices. The Public Sector OMCs increase and decrease the prices on the basis of the price of respective  products  in  the  international  market  and  not  to  that  of  crude  oil.  Public Sector  OMCs,  namely, Indian Oil Corporation Limited, Hindustan Petroleum Corporation  Limited  and  Bharat  Petroleum  Corporation  Limited  have  implemented daily revision of retail selling price of petrol and diesel in the entire country effective 16 th  June, 2017. Daily price revisions of petrol and diesel make the retail prices more reflective of the current market conditions, minimizing the volatility in the RSP of petrol and diesel.  Further, it leads to increased transparency in the system and enables smoother flow of products from refinery/depots to Retail Outlets.

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