The Union government has today hiked the excise duty on petrol and diesel by Rs 1 and Rs 1.50 per litre. It is the third increase this month to mop up additional revenue of more than Rs 3200 crore, thereby trying to manage the shortfall in its disinvestment bag. However it is said that the hike will not increase the retail price of both the fuels, as it would adjusts against the reduction in rates that may have been possible owing to the fall in international prices.
Basic excise duty on unbranded or normal petrol has been increased from Rs 8.48 per litre to Rs 9.48 and the same on unbranded diesel from Rs 9.83 to Rs 11.33, a notification of the Central Board of Excise and Customs (CBEC) said.
The government had on January 16 hiked the excise duty on petrol by Rs 0.75 per litre and Rs 2 on diesel to mop up over Rs 3,700 crore in additional revenue. Prior to that, the government on January 2 had hiked the excise duty on petrol by Rs 0.37 per litre and Rs 2 on diesel to mop up a little less than Rs 4,400 crore.
The three hikes in excise duty this month takes to five the number of times tax rates on the two fuel have been raised this fiscal. On December 17, excise duty on petrol was hiked by Rs 0.30 per litre and Rs 1.17 a litre on diesel to garner Rs 2,500 crore. Previously on November 7, excise duty on petrol was raised by Rs 1.60 per litre and diesel by 30 paise to raise Rs 3,200 crore.
With the five increases, the government is hoping to cover up over Rs 17,000 crore to meet its budgetary deficit.