Finance Minister P Chidambaramon Thursday ruled out cut in import duty on crude oil, which has been ruling above $120 a barrel in the international market resulting in increased losses to state-owned oil marketing companies. "No. Because mere reduction in import duty on crude oil has no impact on administered prices," he told reporters when asked whether the government was considering cut in duties on the pattern of food articles.
The government has not been able to pass on the burden of spurt in crude oil prices because of the pressure from the Left parties, which have also been demanding that taxes be reduced to make up for the losses of the oil companies. The government has so far been partly compensating the oil firms like Indian Oil Corporation, HPCL and BPCL by giving them bonds. Finance Ministry has issued them oil bonds worth Rs 20,333 crore and has agreed to compensate them more to the extent of Rs 15,000 crore for 2007-08.
Besides, the finance minister also said there was big scope for further reduction in retail prices. "I do think that there is a scope for significant reduction in cement prices," Chidambaram told reporters here.