New Delhi, Oct. 8 (PTI): Petroleum minister Ram Naik will meet finance minister Jaswant Singh tomorrow to seek a cut in excise duty on petrol and diesel to reduce the impact of the recent spurt in global crude oil prices.
Naik, who held a round of discussions on the issue last month, would build a case for revenue neutral duty cut according to the system evolved after the dismantling of the administered pricing mechanism (APM), sources said.
The revenue loss due to the cut in excise duty on petrol and diesel would be offset by the increased customs revenue on crude oil from rise in import price.
According to an estimate, the crude oil import bill has shot up by around Rs 4,000 crore to Rs 39,000 crore in the first six months of the current fiscal on a 40 per cent jump in crude prices, they said.
The Indian basket of crude, comprising Oman/Dubai crude oil for sour grade and brent for sweet grade in the ratio of 58:42, averaged $ 26.13 a barrel during the July-September quarter.
In October, the average price shot up to $ 28.06 a barrel.
The Indian basket of crude averaged little less than $ 25 a barrel in June when excise duty on petrol and diesel was cut by 2 per cent, sources said adding a 2 per cent cut in excise duty would be necessary to offset the recent spike in crude prices.
After the dismantling of APM, while state-owned retailing firms were given freedom to align their costs with international selling prices of products every 15 days, the finance ministry was to consider every three months reduction or increase in duties in step with increase or decrease in crude oil prices.