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Cars, SUVs consume 16% of total subsidised diesel

business Updated: Aug 23, 2012 19:04 IST

About 16% of subsidised diesel sold in India is consumed by cars and SUVs, prompting oil ministry to propose levy of additional excise duty on diesel cars, the Lok Sabha was informed on Thursday.

Of the 64.74 million tons of diesel consumed in the country during 2011-12, 15.88% was burnt in passenger vehicles - cars and SUVs, minister of state for petroleum and natural gas RPN Singh said in a written reply to a question.

Another 4.60% of diesel was used up by power generators while mobile phone towers used up to 1.93%.

"The ministry of petroleum and natural gas in its budget proposal to the ministry of finance had proposed to levy additional excise duty on diesel cars," he said.

Subsequently, the ministry has also written to the finance ministry for levying additional excise duty on diesel cars, gensets and mobile towers, he said.

The ministry has sought Rs. 1.70 lakh additional duty on small diesel cars and Rs. 2.55 lakh on medium and large cars saying the the huge difference of Rs. 27.14 a litre between the price of petrol and diesel had led to an abnormal growth of diesel car.

While a litre of petrol in Delhi costs Rs. 68.46 per litre, diesel is priced at Rs. 41.32.

At current price diesel, which is the most consumed fuel in the country, is being sold at a price that is Rs. 15.55 per litre less than its cost. It makes up for close to 44% of the 147.99 million tons of fuel consumed in 2011-12.

Singh said diesel sales rose 7.8% in 2011-12 to 64.74 million tons.

Overall, petroleum product (all fuels) consumption soared 4.9% in the fiscal.

The government currently imposes similar duties on petrol and diesel cars.

The excise on cars more than 4 metres in length and with an engine capacity of 1500cc or more is 27%.

It is 24% on models that are more than 4 metres in length but have smaller engines, while it is 12% on smaller cars.

Besides diesel, the government also subsidises domestic cooking gas (LPG) and kerosene.

During 2011-12, the three oil marketing companies lost Rs. 138,541 crore in revenues on selling diesel, LPG and kerosene at government controlled rates.

To make up, the Government gave Rs. 83,500 crore in cash assistance, while upstream firms like Oil and Natural Gas Corp (ONGC) chipped in Rs. 55,000 crore.