Price of branded petrol, which costs almost Rs 10 a litre more than normal petrol, is all set to come down.
Finance minister Arun Jaitley announced a cut in the central excise duty on branded petrol by over Rs 5 a litre, a move that will bring down the price and revive sales of this premium fuel at pumps of state oil marketing companies such as Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) across the country.
“Central excise duty on branded petrol is being reduced from Rs 7.50 per litre to Rs 2.35 per litre,” according to the budget proposal.
Asked if the duty cut by over Rs 5 a litre will mean an equivalent cut in the consumer price of branded petrol, a senior Indian Oil executive said, “we will see how much of the excise duty cut benefit can be passed on.”"The sales of branded petrol have almost vanished and we have started using premium petrol dispensing equipments for regular petrol.... reviving sales of the premium fuel would mean additional investments and hence the exact reduction in customer price will be decided in the next few days," the finance mministe said.
The differential excise duty led to a huge difference in price of normal and branded fuel, resulting in sales of the premium version dropping to almost nil.
The removal of excise duty would narrow the difference in price of branded and normal petrol. While IOC has stopped sale of premium petrol, BPCL’s premium branded petrol — Speed — costs Rs 83.03 in Delhi while normal petrol is priced at Rs 73.55 a litre.