Delhi: Rising global oil prices may push up India’s import bill by up to $50 billion, impacting current account deficit, but would have little impact on growth, Economic Affairs Secretary Subhash Chandra Garg said today even as he remained non-committal on cutting excise duty to the ease the burden on consumers.
The government is watching the situation developing from oil prices hitting $80 a barrel — the highest since November 2014, and adequate steps will be taken, he told reporters here without elaborating. Asked if the government would cut excise duty on petrol and diesel, he said he has nothing to say on that front. “Just watch.”
The BJP-led government had raised excise duty nine times — totalling Rs 11.77 per litre on petrol and Rs 13.47 on diesel — between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs 2 a litre.
Garg parried questions on whether the government was considering a cut in excise duty, which makes up for a fourth of retail selling price.
Asked at what levels of oil prices would the government decide to tweak taxes, he said, “it would be difficult to give a figure”.
Petrol prices have risen by about a rupee per litre since Monday when state-owned fuel retailers resumed daily revision in retail prices after a 19-day pre-Karnataka poll hiatus. Diesel prices have gone up by Rs 1.15 a litre during this period. Petrol now costs Rs 75.61 per litre in Delhi, the highest in almost five years, and diesel rate is at an all-time high of Rs 67.08.
Rise in crude poses risk to CAD
NEW DELHI: Crude oil prices may rise further in the coming months, following which India’s current account deficit will be around 2.4 per cent in 2018-19, says a Goldman Sachs report. According to the global financial services major, the rise in international crude prices poses risks to India’s current account deficit. “Our commodities team expects oil prices to continue to rise over the course of this summer, before moderating slightly at the end of the year. We recently increased our 2018-19 current account deficit (CAD)forecast to 2.4 per cent of GDP (from 2.1 per cent of GDP earlier),” Goldman Sachs said.