NEW DELHI: The excise duty cut on petrol and diesel by Rs 10/litre, and a hike in export duty on ATF and diesel will result in a net revenue loss of Rs 5,500 crore in a fortnight, a top official said on Friday said.
Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Chaturvedi said the excise duty cut will result in a revenue loss of around Rs 7,000 crore, while the hike in special additional excise duty on export of diesel and ATF will fetch Rs 1,500 crore more in a fortnight.
After reduction in excise duty, the incidence of excise on petrol will be Rs 11.9 per litre (Rs 1.40 basic excise duty, Rs 3 special additional excise duty, Rs 2.50 agriculture infrastructure and development cess, and Rs 5 road infrastructure cess).
On diesel and aviation turbine fuel (ATF), an export duty of Rs 21.5 per litre and Rs 29.5 per litre has been imposed effective March 26.
The rates will be reviewed on a fortnightly basis.
The move to levy export duty on diesel and ATF is to "prioritise 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 supply chain", Chaturvedi said at a media briefing.
Excise duty cut on petrol, diesel is aimed at reducing under-recoveries of oil marketing companies (OMCs) and ensuring prices do not rise for consumers on account of the ongoing crisis, he said.
"The situation is dynamic, it is not business as usual where you would have a predictability that certain metric tonne of goods will come. We are living in difficult times. Any (revenue) implication will have to factor in actual supply of goods coming into the country," Chaturvedi said.
The excise duty cuts follow record losses that oil companies 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 attack on Iran and Tehran's sweeping retaliation disrupts global supply.
Despite oil prices rising above USD 100 per barrel, retail pump rates had remained on freeze. 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 on the intensifying Iran war, before pulling back to around USD 100 a barrel.