Transport research body seeks reduction in excise duty on diesel
The Indian Foundation of Transport Research and Training (IFTRT) has written to Finance Minister Arun Jaitley seeking a roll back of the nine excise duty hikes on diesel between November 2014 and January 2016.
SP Singh, Senior Fellow at IFTRT, wrote in a letter to the Finance Minister, “The central government and later various state governments periodically increased excise duty and sales tax on diesel to retain the benefit of plummeting international crude oil prices. Now, the international crude oil prices have shot up to USD 49.05 a barrel the truck rentals too are shooting up more due to the diesel price hike and other reasons.”
“It is high time that the Centre should reduce/roll back at least half of the excise duty increase on diesel done since November 2014.”
The nine excise duty hikes since November 2014 have led to the levy increasing by ₹13.47 a litre since then.
IFTRT has sought at least a reduction to the tune of around ₹6-7 a litre.
“This is not a relief to the truckers or the agriculture sector but for the larger interests of the economy,” Singh wrote. IFTRT has also suggested that the reduction in excise duty can only be extended to trucks and commercial vehicles.
“Diesel guzzling cars/SUVs should not be extended with this benefit,” Singh wrote.
As a result of the hikes in excise duty, the retail selling price of diesel is now almost as high as that in November 2014, despite the fact that Indian refiners are currently paying less to source crude oil.
The retail selling price of diesel in Delhi currently stands at ₹51.67 a litre while Indian crude basket or the price at which domestic refiners bought crude oil stood a USD 46.62 a barrel on May 17.
In November 2014, the retail selling price of diesel in Delhi was ₹53.35 a litre at a time when the Indian crude basket averaged at $76.43 a barrel.
Over the two years, the rupee has also weakened. While one US Dollar was worth ₹61.80 in November 2014, as on May 17, 2016 it has weakened to ₹66.72.