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    Excise duty cut on fuel likely to have negative impact fiscal deficit glide path

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    Excise duty cut on fuel likely to have negative impact fiscal deficit glide path

    Excise duty cut on fuel will negatively impact fiscal deficit glide path, government sources said.
    Every rupee cut in excise for fuel will be resulting in a loss of about Rs 13,000 crore, the sources added.
    State-owned oil firms, which have been revising auto fuel prices daily since June 2017, on Sunday raised petrol and diesel rates by 19 paise per litre each in Delhi.
    The government recently asked oil companies to absorb Re 1 per litre in order to pass on maximum benefits to consumers, as crude oil prices touched a four-year high.
    Oil marketing companies take into account the global performance of crude oil, excise duties and the state-wise value added tax (VAT).
    The petroleum ministry is yet to officially ask for a cut in excise duty, the sources mentioned. The official sources suggested that states should instead cut the VAT on fuel to ease the burden on the consumer.
    State-owned oil marketing firms, however, are facing a tough time cutting prices, as they are unable to cope with the pressure of complying with government-introduced subsidies, among other developments.
    Oil ministry had earlier this year sought a reduction in excise duty on petrol and diesel to cushion the impact arising out of international oil rates but Arun Jaitley, finance minister, in his Budget presented on February 1 made no concessions.
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