Aiyar to meet cabinet on petro issues

Petroleum Ministry will approach cabinet on revising petrol and diesel prices as a fallout of Budget proposals reducing customs duty but increasing excise duty on petroleum products.

"I am readying myself to go to the cabinet to secure instructions as how to proceed further. This will take a few weeks time. Till such time, there will be no change in prices," Petroleum Minister Mani Shankar Aiyar said.

In the Union Budget yesterday, P Chidambaram had proposed raising excise duty on the two products and levy of Rs 0.50 per litre additional cess for road projects.

Chidambaram had also proposed slashing of excise and customs duty on LPG and kerosene to nil.

The proposals reflect the suggestions by advisory group on tariff, headed by chief economic advisor Ashok Lahiri, for insulating the economy and oil price hikes.

After taking into account the customs duty cut to 10% from 15%, changing excise duty on petrol from 23% plus Rs 7.5 per litre (including Rs 1.5 a litre road cess) to 8% plus Rs 13 per litre (including Rs 2 per litre road cess and Rs 6 a litre special additional excise duty), warranting an increase of Rs 2.50 per litre.

Similarly, excise duty on diesel has been changed from 8% plus Rs 1.50 per litre (road cess) to 8% plus Rs 3.25 per litre (including Rs 2 per litre road cess), warranting a Rs 0.65 a litre increase.

"We are weighing in the implications of budget for the entire range of proposals for the oil sector," Aiyar added.