Budget 2019 : Petrol/Diesel Prices
The Union Budget has made the following changes to its hydrocarbon policy for better revenue realization-
- The Union Budget 2019 has raised the excise duty and the road & infrastructure cess on the auto fuel by Rs 2 each. This will raise an additional Rs 28,000 crores for the Indian government.
- The Import of petrol and diesel which attracted a customs duty equivalent to the total levy of excise has been, with effect from July 6, removed (Rs 9 a liter import duty equivalent to road and infrastructure cess).
- An additional levy of Rs. 1 per tonne of imported crude oil is being levied. The total quantum of imported oil in India is 220 million tonnes. This would mean an additional revenue of 22 crores for the government.
- At present, the Government does not charge any customs duty on crude oil apart from a Rs 50 per tonne national calamity contingent duty (NCCD).
Why this has been done?
The Crude prices have reduced significantly from their highs observed last year. This, coupled with less uncertainty on the oil market gives the Finance minister a room to review the excise duty and cess on petrol and diesel.
What happens now?
The final increase in the price of petrol would be over Rs 2.5 per litre and that on diesel would be Rs 2.3. This has a major bearing on the pockets of the middle class and would majorly impact the fiscal headroom of the transport industry. An increase in the prices would make the transport of goods more expensive.