To provide relief to Oil Marketing Companies from under-recovery, the Finance Ministry has announced a cut in components of Central Excise Duty on petrol and diesel. However, there will be no change in the retail prices of these products.
The Ministry issued a series of notifications facilitating a reduction of ₹ 10 per litre in Central Excise Duty on petrol and diesel. Madhavi Arora, Chief Economist of Emkay Global, says such a move will help in absorbing 30-40 per cent of annualised losses of OMCs on auto fuel at current prices. “The annualised fiscal hit to the govt. would be ₹1.55 trillion owing to this burden sharing,” she said.