In all, it raised excise duty on petrol by Rs.11.77 a litre and that on diesel by Rs.13.47. Every Re 1 cut in excise duty would cost the exchequer Rs.3,500 crore on petrol and Rs.9,000 crore on diesel for the full year. CEA Arvind Subramanian last month submitted an approach paper to the finance ministry on scenarios to deal with a rise in crude oil prices. Officials said the CEA suggested status quo on excise duties till oil prices climb to $65 per barrel, from the present $49 levels. Every rupee per litre increase in petrol price leads to 0.02% rise in WPI inflation and 0.07% for the same amount of increase in diesel rates.

Source: Mint July 03, 2016 08:03 UTC