India cuts fuel import duty

10:54, June 25, 2011      

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Indian government on Friday announced to cut the customs duty of crude oil from 5 percent to zero in a bid to lift burden on state-owned oil marketing companies, according to local media.

An empowered group of ministers headed by Indian finance minister Pranab Mukherjee also decided to cut customs duty of diesel and petroleum from 7.5 percent to 2.5 percent and excise duty on diesel from 4.6 rupees per liter to 2 rupees per liter.

The slash of customs duties and excise tax will cost Indian government 490 billion rupees (10.9 billion U.S. dollars) this fiscal year due to losses of revenue.

Meanwhile, the group of ministers decided to increase diesel and kerosene prices by 3 rupees per liter and 2 rupees per liter respectively. Additionally, the price of cooking gas LPG was raised by 50 rupees each cylinder.

The hike of prices was consistent with Indian central bank's call to pass on high international crude prices to domestic consumers and will help cool robust demand and persistent inflation.

The rise in diesel, kerosene and LPG prices will enable state- owned oil marketing companies to earn extra 210 billion rupees (4. 67 billion U.S. dollars).

Now, Indian state-owned oil marketing companies lost 15 rupees on sale of every liter of diesel, 27 rupees per liter of kerosene and 381 rupees per cylinder of LPG.

The diesel and LPG prices went up by 2 rupees per liter and 35 rupees per cylinder last June with petroleum prices becoming market-oriented.

Source: Xinhua
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