The petroleum ministry has proposed that, in view of the recent spurt in the international prices of crude oil and petroleum products, it is essential to bring down excise duty on LPG and PDS kerosene to almost half the present level of 8 per cent in case the government wishes to avoid an oil price-hike.
The ministry, however, has said that in case LPG and kerosene duties are rationalised, it would not be necessary to bring down duties on high speed diesel (HSD) which accounts for 40 per cent of the total consumption of petroleum products.
This, according to the petroleum ministry, will also prevent any inflation in the economy and ensure adequate inflow of revenue for the finance ministry.
The petroleum ministry has also stressed that if duties on petroleum products are not rationalised and the international prices of crude oil continue to rule at the present high of $32 a barrel, it would not be possible for the government to handle deficit in the oil pool account, which is ballooning at over Rs 500 crore a month and crossed the Rs 7,500-crore mark on June 30.
It is feared that in case the government neither reduces duties on petroleum products nor increases their domestic prices, the deficit in the oil pool account at the end of the current financial year would cross the Rs 15,000-crore mark.
Moreover, in case the international prices of crude oil continue to rule above $32 a barrel for the balance of the current fiscal, the country
