Excise Hike of Rs. 2 on Petrol, Diesel from 2 Jan

Oil Marketing Cos Reap Windfall Gain Due to Halving of Crude Price

[Central Excise Notification No. 01 dated 1^st January 2015]

The Government has hiked excise duty on petrol and diesel by uniform Rs. 2 per litre by a notification issued on 1 January 2015.

The new rates are:

	Rs./Litre
Unbranded Petrol	6.95
Branded Petrol	8.10
Unbranded Diesel	5.96
Branded Diesel	8.25

The hike in petrol is steep going up to Rs. 6.95 now as against Rs. 1.20 on 14 September 2012 when the current series of hikes started.

The world prices for Indian crude have fallen from $108/barrel in November 2012 to the current rate of $53.51 which means that the prices have halved. On the other hand, pump prices in the same period have fallen by only 21% to Rs. 61.33 when they should fall to Rs. 36.35 per litre from the peak of Rs. 73.6 in July 2014.

The excise duty has gone up by only Rs. 5.75 per litre, after adding 20% VAT, which comes Rs. 2.09, the tax element is only Rs. 7.84 per litre. Thus the price should be Rs. 44.19 per litre as against the current price of Rs. 61.33 per litre.

In other words, the oil marketing companies are gaining Rs.17.14 per litre on petrol alone. These margins do not include the fall in interest costs due the halving of import price.

In exercise of the powers conferred by sub-section (1) of section 5A of the Central Excise Act, 1944 (1 of 1944), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.12/2012-Central Excise, dated the 17^th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide G.S.R. 163(E), dated the 17^th March, 2012, namely: -

In the said notification, in the Table,-

(i) in serial number 70,-

(a) against item (i) of column (3), for the entry in column (4), the entry “₹ 6.95 per litre” shall be substituted;

(b) against item (ii) of column (3), for the entry in column (4), the entry “₹ 8.10 per litre” shall be substituted;

(ii) in serial number 71,-

(a) against item (i) of column (3), for the entry in column (4), the entry “₹ 5.96 per litre” shall be substituted;

(b) against item (ii) of column (3), for the entry in column (4), the entry “₹ 8.25 per litre” shall be substituted;

2. This notification shall come into force with effect from the 2^nd day of January, 2015.

[F. No.354/123/2014-TRU]