Why in News?
The Union Government reduced Special Additional Excise Duty (SAED) on petrol and diesel by ₹10 per litre each. However, fuel prices at petrol pumps remained unchanged because the benefit was not passed on to consumers.
Why Did Fuel Prices Not Decrease Despite Excise Duty Cut?
• Government reduced Special Additional Excise Duty (SAED)
• Diesel duty reduced to Zero
• Petrol duty reduced to ₹3 per litre
• Oil Marketing Companies (OMCs) absorbed benefit instead of consumers
• Objective was to reduce losses faced by OMCs
• Government clarified cut not meant to lower retail prices
Why Are Oil Marketing Companies Facing Losses?
• Global crude oil prices surged above $111 per barrel
• Public sector OMCs selling fuel below cost
• Under recovery around ₹24 per litre petrol
• Under recovery around ₹30 per litre diesel
• Total losses around ₹2,400 crore per day
Why Did Government Increase Export Duties?
• Export duty on diesel increased to ₹21.5 per litre
• Export duty on ATF increased to ₹29.5 per litre
• Expected additional revenue ₹1,500 crore
• Helps offset fiscal loss from excise duty cut
What Is the Fiscal Impact of the Decision?
• Excise duty cut cost around ₹7,000 crore
• Export duty increase adds ₹1,500 crore
• Net revenue loss around ₹5,500 crore per 15 days
• Review every fortnight by government
What Other Measures Were Announced?
• Commercial LPG allocation increased by 20%
• Total LPG allocation raised to 70% of pre crisis levels
• Priority sectors where Piped Natural Gas (PNG) unavailable
| [2025] Suppose the revenue expenditure is ₹80,000 crores and the revenue receipts of the Government are ₹60,000 crores. The Government budget also shows borrowings of ₹10,000 crores and interest payments of ₹6,000 crores. Which of the following statements are correct? I Revenue deficit is ₹20,000 crores. II Fiscal deficit is ₹10,000 crores. III Primary deficit is ₹4,000 crores. Select the correct answer using the code given below: (a) I and II only (b) II and III only (c) I and III only (d) I, II and III |
