New Delhi, Apr 3: Petroleum Minister Murli Deroa has asked Prime Minister Manmohan Singh to cut customs duty on crude oil to give respite to retailers who are likely to go bankrupt due to the non stop price rise.
With crude oil prices hovering over the 100 dollar a barrel mark, retailers Indian Oil, Bharat Petroleum and Hindustan Petroleum who together lost Rs 77,304.50 crore on sale of petrol, diesel, domestic LPG and kerosene in 2007-08, are projected to lose a whopping Rs 130,000 crores revenue on sale of fuel in current fiscal.
"As the Government scrapped import duty, 5 percent customs duty should also be made nil on petroleum crude oil," Deora told reporters.
After considering subsidy contribution from companies like ONGC and GAIL, a gap of over Rs 12,000 crore still remained uncovered.
Deora asked Prime Minister to raise the quantum of oil bonds after Singh rejected the idea of nil customs duty on petroleum crude oil.
Deora also mentioned the five percent customs duty on crude oil yielded more revenues to the Government since the rate was fixed when crude was at 32 dollars per barrel.
" Taxes and duties make 32 percent of the diesel selling price of Rs 31.76 per litre. Out of the Rs 45.52 a litre price of petrol in Delhi, only Rs 22.02 per litre goes to oil companies and the rest is all duties," he said.
A cut in customs duty on crude oil would reduce the raw material cost of oil companies and thereby would bring respite from the international oil hike.