Oil ministry presses for Re 1/l duty cut on diesel

Petroleum and Natural Gas Minister Murli Deora today said he has sought an immediate Re 1 a litre excise duty cut on diesel.

He has also sought infrastructure status for the gas pipeline sector, and exploration and production projects.

"We have sought a cut in excise duty on diesel, and we want to expand the ambit of infrastructure status to gas pipeline, and exploration and production activities "" so that they attract due benefits and investments," Deora told reporters after a pre-budget meeting with Finance Minister P Chidambaram.

Deora said his ministry has also sought import duty waiver on exploration and production equipment. The minister also said he will seek zero excise duty on diesel in the Budget for 2007-08 (April-March).

Currently, excise duty on diesel is levied at 8.16% of ex-factory price, plus Rs 3.32 a litre. However, excise duty on diesel could be brought down to zero in a phased manner, Deora said.

He said the increase in cess on indigenous crude oil would help neutralise the impact of reduction in excise duty. Government had this year raised cess on indigenous crude oil to Rs 2,500 a tonne from Rs 1,800 a tonne.

The minister is likely to meet visiting Russian President Vladimir Putin on Thursday to discuss cooperation in the energy sector.