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Oil Ministry Moots Extra Excise Duty on Diesel Cars

  • The Petroleum and Natural Gas Ministry has proposed an additional excise duty of Rs.80,000 on diesel-driven cars in the coming Budget, besides seeking a 5 per cent import duty exemption on LNG and natural gas to discourage dieselisation. These are part of the budgetary proposals officially sent by the Ministry to the Finance Ministry for inclusion in the Budget 2012-13. These recommendations, made to the Finance Ministry formally for the first time, are in line with the suggestions made by the Kirit Parikh Committee.

Additional revenue

  • “Imposition of new levy on diesel-driven cars will not only discourage dieselisation of our economy but will bring in additional revenue for meeting the under-recoveries of oil marketing companies,” officials close the development said.Official figures point out that in the last 15 years (with exception to 1996-97 and 2004-05), petrol growth has been generally more than diesel. But in April-November, 2011, diesel growth has been 7.4 per cent as against the petrol growth rate of 4.3 per cent. Similarly, the growth rate of diesel for November, 2011(over November 2010) has been 16 per cent as against a negative growth of -2.4 per cent in petrol.

Northeast refineries

  • The Ministry has also urged the Finance Ministry to continue excise duty concession to northeast refineries, declare the goods status to natural gas and LNG, and remove the national calamity contingent, levied at the rate of Rs. 50 a tonne, on crude oil.

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