Budget 2018: Petrol price hiked; Diesel price unchanged in metropolitan cities

Budget 2018: Petrol price hiked; Diesel price unchanged in metropolitan cities

Budget 2018: Petrol price hiked; Diesel price unchanged in metropolitan cities

"The budget has changed the tax structure for MS and HSD with more taxes aligned towards Road and Infrastructure cess and less on excise duty, so that adequate funds will be available for the road building programme, without impacting the consumer prices", K. Ravichandran, Senior Vice President and Group head at ICRA said.

The development came shortly after FM Jaitley announced the government's decision to cut excise duty on petrol and diesel by Rs 2. However, three months after, the price of brent crude oil price rose to over $13 per barrel and the fuel price, subsequently, shot up over Rs 3 per litre - completely reversing the impact of the cut. Basic excise duty on branded diesel was also reduced from Rs 10.69 per litre to Rs 8.69 per litre.

The fuel prices, which are revised on daily basis, have constantly been rising since December 1.

The difference between the price of petrol and diesel has narrowed drastically in the past few years.

The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting global oil prices.

"We urge fuel retailers to be fair to motorists and pass on the current savings in the wholesale price of petrol and diesel at the pump".

The high costs are due to the rising price of oil which recently increased by 2%, although this has been offset to some extent by the recent boost to the pound. "So, given that it is free pricing now, any projection on prices of petrol and diesel will be hard", Raju Kumar, tax partner, EY, said. People had to pay RS 73.05 for a litre.

According to TaxGuru data, total excise duty on motor spirit remains unchanged. Production curbs by the Organisation of the Petroleum Exporting Countries and high demand have led to the surge.

Union Finance Secretary Hasmukh Adia told a post-Budget media briefing that the changes won't affect the customer.

Firstly, the government earns substantial revenue from petro-products through taxation, as they have been kept out of the Goods and Services Tax (GST) regime.

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