Fuel  levies seen to fetch rs.86000cr,  The telegraph, R.Suryamurthy   25 Dec2011

New Delhi, Dec. 25: Revenues from petroleum in this fiscal are estimated at Rs 86,000 crore even as the government cut duty rates earlier this year in the face of higher crude prices. Higher fuel prices ensured the collections were encouraging at the lower rates.

"The total revenue from the petroleum sector is expected to  be Rs 86,000 crore in 2011-12 after adjusting the duty forego," a senior oil ministry official said.

The finance ministry had scrapped the 5 per cent custom duty on crude oil and reduced the excise duty on diesel to Rs 2 per litre from Rs 4.60 per litre, resulting in a revenue loss of Rs 50,000 crore. Collections in 2010-11 stood at Rs 136,497 crore. The revenue of the state governments is unlikely to take a hit as they had not cut the taxes.

Analysts said despite the contribution of the petroleum sector to the exchequer, the high subsidy on petroleum products was not sustainable and the rise in global prices should be passed on to the consumers.

Former petroleum secretary S.C. Tripathi said, "The political leadership will not be able to sustain this high level of subsidy for long. They will be forced to initiate reforms in the energy sector."

Petroleum contributed Rs 225,494 crore to the combined revenues of the Centre and states last fiscal. However, the Centre's subsidy payout to state-run oil firms for selling kerosene, domestic cooking gas and diesel below cost was Rs 43,926 crore.

Earnings from the petroleum sector have increased steadily in the past three fiscals, while the subsidy payouts have been fluctuating.

In 2010-11, the Centre got Rs 136,497 crore, while the state governments got Rs 88,997 crore. During 2009-10, the contribution was Rs 111,779 crore for the Centre and Rs 72,082 crore for the states. In 2008-09, the central and state tax on petroleum products was Rs 93,513 crore and Rs 68,285 crore, respectively