New Delhi: With petrol ruling at 55-month high and diesel at record levels, Andhra Pradesh Chief Minister N Chandrababu Naidu has asked Central government to cut excise duty on the fuels to ease the burden on people.
In a letter to Oil Minister Dharmendra Pradhan, Naidu said the Centre had between November 2014 and January 2016 hiked excise duty on petrol and diesel nine times to take away gains arising from a slump in global oil prices. But when rates started moving up, it reduced tax by just Rs 2 a litre in October last.
Subsequent to that excise duty cut, prices have shot up.
"As there is no cut in the excise duty (thereafter), there is no relief to the common man," Naidu wrote in a 4 May letter, a copy of which was reviewed by PTI.
Petrol at Rs 74.63 a litre is highest in 55 months while diesel at Rs 65.93 is at a record high.
"In fact, petrol and diesel in India are priced Rs 16.35 and Rs 15.15 higher on an average than that of our neighbouring countries which are also dependent on imports," he wrote.
Naidu said the neighbouring countries had passed on the benefit of fall in global crude prices to retail users.
He asked Pradhan for "downward revisions of prices (that) may be effected by reducing excise duty so as to reduce them to the levels of 2014."
Petrol and diesel contribute 2.5 percent in the inflation index and not cutting retail rates would erode the purchasing power of the common man and hurt GDP.
"I request you to take immediate necessary steps to reduce the prices of petrol and diesel," he wrote.
Against average price of USD 96 per barrel during 2009-2014 for the basket of crude oil India buys, Indian crude basket averaged USD 57.59 a barrel between May 2014 and April 2018.
"The excise duty on petrol was Rs 9.48 in June 2014 (and) reached a peak of Rs 21.48 in March 2016 and is now hovering at Rs 19.48 since October 2017.
"The same in case of diesel is Rs 3.56 in June 2014, peaked at Rs 17.33 in February 2016 and is now hovering at Rs 15.33 since October 2017," he wrote.
Naidu, who broke away from the NDA over the issue of special package for his state, sought Pradhan's intervention to resolve the high prices of petrol and diesel.
"By consuming 194 million tonne of oil products, (India) contributes to 4.9 percent of the global consumption and is the largest contributor (21.8 percent) to an incremental increase in global consumption," he wrote.
Updated Date: May 11, 2018 16:11 PM