Govt rules out excise duty cut as fuel prices hit a fresh high

New Delhi, September 4 

The government will not cut excise duty on petrol and diesel to cushion spiralling prices, which touched fresh highs on Tuesday, as it has limited fiscal space available to take any dent in revenue collection, a top official said.

With imports becoming costlier because of a free fall in rupee against the US dollar, the government believes the current account deficit will overshoot the target and it cannot “disturb fiscal maths by cutting excise duty on petrol and diesel,” the official, who wished not to be identified, said.

Petrol and diesel prices on Tuesday touched fresh highs as rupee dipped to a record low of 71.54 against US dollar, making imports costlier.

Petrol price in Delhi rose to a record Rs 79.31 a litre and diesel climbed to an all-time high of Rs 71.34, renewing calls for a cut in excise duty to cushion the spike. Almost half of the retail selling price of the two fuel is made up of central and state taxes.

According to a price notification of state-owned fuel retailers, petrol price was Tuesday hiked by 16 paise per litre and diesel by 19 paise.

Fuel rates have been on fire since mid-August, rising almost every day due to a combination of a drop in rupee value and rise in crude oil rates.

Petrol price has risen by Rs 2.17/litre since August 16 while diesel rates have climbed by Rs 2.62 — the biggest hike witnessed in a fortnight since the launch of daily price revision  mechanism. — PTI

Fiscal maths of petro prices 

• Petrol and diesel prices on Tuesday touched fresh highs as rupee dipped to a record low of 71.58 against US dollar, making imports costlier
• Petrol price in Delhi rose to a record Rs 79.31 a litre and diesel climbed to an all-time high of Rs 71.34, renewing calls for a cut in excise duty to cushion the spike
• Almost half of the retail selling price of the two fuels is made up of central and state taxes

Re tanks 37p to 71.58/dollar

Mumbai: The rupee crumbled by a staggering 37 paise to end at a fresh lifetime low of 71.58 against the resurgent dollar on Tuesday as persistent trade worries and macro concerns continue to proliferate.

The rupee stretched its record fall for the fifth-straight session even as the RBI remained mostly on the sidelines,  currency market participants said.

After witnessing wide swings, it finally ended at its historic low level of 71.58, revealing a sharp loss of 37 paise. — PTI