The oil & gas industry is probably the most volatile industry among others in the nation. Thus, frequent change in price is not an uncommon scenario for the industry and people. While people are used to sudden price hike or cut in petrol or diesel rates, a negative price change is always welcomed. Recently, government of India has hiked the excise duty on petrol and diesel by Rs 1.5.
As speculated by the people, the move comes in order to boost government revenues and contain budget borrowing that could put off a likely cut in the retail prices of the two fuels.
According to ET report, while the duty on branded petrol excise was hiked to Rs 3.85/litre from Rs 2.35/litre, that on unbranded petrol was hiked to Rs 2.70/litre from Rs 1.20/litre. Excise duty for branded diesel was raised to Rs 5.25/litre from Rs 3.75/litre and that of unbranded diesel was hiked to Rs 2.96/litre from Rs 1.46/litre.
However, the excise duty hike is unlikely to affect fuel prices for consumers. Oil companies are likely to cut petrol and diesel prices shortly, due to sliding global prices. NDTV reports that the quantum of the price cut may be lower due to the excise duty hike. Those expecting further relief in prices, may be in for disappointment, as the excise duty hike may offset the likely reduction in prices. There is a possibility that cut may be put off altogether, as well. The government’s move to hike excise duty is aimed at getting higher revenues in its coffers.
If prices are cut again, it would be the seventh reduction in petrol prices since August and the third in rates of diesel since its decontrol last month.
Well as long as the price fluctuations don’t affect the consumers’ pocket, we are not complaining about the volatile nature of this sector.
John Brown Jersey