Pradhan justifies hike in fuel cess, says needed to boost infrastructure development

New Delhi, July 05: Union Petroleum Minister Dharmendra Pradhan downplayed the hype around the increase in excise duty and cess each on petrol and diesel, and said collection is needed for investment in infrastructure development.

Petrol and diesel are set to get dearer by Rs 2 a litre following a duty hike proposed in the budget.

"Investment needed in roads, railways, electricity, water, LPG connections needed in houses of poor. Government through its tax mechanism is collecting this resource in forms of cess and excise from Petroleum Sector," Pradhan told reporters when asked about the announcement in the Budget.

Presenting the first Budget of the Modi government in its second term, Finance Minister Nirmala Sitharaman on Friday raised cess on petrol and diesel by Re 1 per litre.

"Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol and diesel," Finance Minister Nirmala Sitharaman said in her budget speech on Friday.

On Friday, petrol and diesel were being retailed for Rs 70.51 and Rs 64.33 a litre respectively in Delhi. In Mumbai, petrol and diesel were priced at Rs 76.15 a litre and Rs 67.40 a litre.