Budget 2018: Oil ministry seeks cut in excise duty on petrol, diesel

India's oil ministry is pushing for a cut in excise duty on petrol and diesel in the upcoming 2018/19 budget 2018 to cushion the impact of rising oil prices on its vast consumer base, two oil ministry officials told Reuters on Monday.

Prime Minister Narendra Modi, who faces elections in key states later this year, and a nationwide election in early 2019, has faced pressure over a rise in retail prices of petrol and diesel to a record level.

India has the highest retail prices of petrol and diesel among South Asian nations as taxes account for about 40-50 percent of the pump prices.

A litre of petrol costs 72.23 rupees ($1.13) while diesel is sold at 63.01 rupees. Petrol and diesel account for about half of India's refined fuel consumption.

"We can only recommend. It is up to the finance ministry to take a decision," a senior oil ministry official said.

A cut in excise duty on petrol and diesel in the budget, due to be unveiled on Feb. 1, would pose challenges as the government is struggling to tackle a widening fiscal gap amid falling tax revenues due to the implementation of a goods and services tax (GST) regime from July.
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