New Delhi, March 27 A reduction in excise duty on petrol and diesel by ₹10 per litre, and an increase in export duty on ATF and diesel, will result in a net revenue loss of ₹5,500 crore in two weeks, a top official said on Friday.
Chairman of the Central Board of Indirect Taxes and Customs (CBIC), Vivek Chaturvedi, said the excise duty reduction will result in a revenue loss of around ₹7,000 crore, while the increase in special additional excise duty on the export of diesel and ATF will generate an additional ₹1,500 crore in two weeks.
After the reduction in excise duty, the excise on petrol will be ₹11.9 per litre (₹1.40 basic excise duty, ₹3 special additional excise duty, ₹2.50 agriculture infrastructure and development cess, and ₹5 road infrastructure cess).
For diesel and aviation turbine fuel (ATF), an export duty of ₹21.5 per litre and ₹29.5 per litre has been imposed, effective March 26.
These rates will be reviewed on a fortnightly basis.
The move to levy export duty on diesel and ATF is to "prioritize domestic availability of diesel and ATF and "ensure energy security for the country in the midst of global uncertainty which has been exacerbated by a disruption in the supply chain," Chaturvedi said at a media briefing.
The reduction in excise duty on petrol and diesel is aimed at reducing the under-recoveries of oil marketing companies (OMCs) and ensuring that prices do not rise for consumers due to the ongoing crisis, he said.
"The situation is dynamic; it is not business as usual where you would have a predictability that a certain metric tonne of goods will come. We are living in difficult times. Any (revenue) implication will have to factor in the actual supply of goods coming into the country," Chaturvedi said.
The excise duty cuts follow record losses that oil companies have suffered from the surge in international oil prices. Prices of crude oil, the raw material for making petrol and diesel, have surged almost 50 per cent this month as the US and Israel's attacks on Iran and Tehran's subsequent retaliation have disrupted global supply.
Despite oil prices rising above USD 100 per barrel, retail pump rates had remained frozen. This had led to oil companies incurring record losses, which had even started impacting their working capital.
International oil prices touched USD 119 per barrel earlier this month due to the intensifying Iran-US conflict, before pulling back to around USD 100 per barrel.