The Minister of State for Petroleum and Natural Gas Shri R.P.N. Singh informed the Rajya Sabha in written reply today that the Oil Marketing Companies (OMCs) that have incurred estimated under-recovery of Rs 1,38,406 crore during 2011-12. These under-recoveries are being partially compensated by the Government through cash assistance and upstream oil companies through discount on crude and petroleum products under the Burden Sharing Mechanism. The Minister added that as the Government continues to modulate the retail selling price (RSP) of Diesel, PDS Kerosene and Domestic LPG, the PSU OMCs are incurring huge under-recovery on sale of these products.
He further said that OMC’s have intimated that in case the prevailing under-recoveries are not adequately compensated, it may adversely impact the OMCs’ ability to purchase crude oil. The Minister stated that “In order to reduce under-recoveries on petrol, OMCs, have, amongst other alternatives, also suggested to the Government to reduce the Excise Duty on Petrol”.
Shri Singh also informed that as per the current Refinery Gate Price (RGP), the OMCs are having under-recovery of Rs 14.29/litre on Diesel, Rs 31.04/ litre on PDS Kerosene and Rs 570.50/ cylinder on Domestic LPG. At these rates, OMCs incur daily under-recovery of Rs 563 crore (Based on RGP effective 16.4.2012 for Diesel and 1.4.2012 for PDS Kerosene and Domestic LPG).
Replying to another question, the Minister said that during 2010-11, the contribution to the Central Exchequer through taxes/duties on crude oil and petroleum products, from dividend to the Government and income tax was Rs 1,36,497 crore. The Excise duties on Petrol and Diesel are specific at the rate of Rs 14.78 per litre and Rs 2.06 per litre (including education cess) respectively. The Excise duties on PDS Kerosene and Domestic LPG are NIL. Hence, Central Government revenue does not increase with increase in the price of these products. Shri Singh under pointed and that The Central Government provided Rs 41,000 crore to the OMCs to part fund their under-recovery of Rs 78,190 crore; and Rs 2904.25 crore and Rs 22.32 crore under the “PDS Kerosene and Domestic LPG Subsidy Scheme 2002” and “Freight Subsidy (For Far Flung Areas) Scheme, 2002” respectively.
He also informed that the total contribution to the State Government Exchequer through VAT, Royalty, Octroi, Entry Tax and Dividend income etc. in 2010-11 was Rs 88,997 crore. “Rates of Sales Tax/VAT are either ad-valorem or ad-valorem plus specific basis. Whenever there is an increase in Retail Selling Prices of these petroleum products, the State Government’s Sales Tax/VAT collection goes up correspondingly,” he added.
He further said that OMC’s have intimated that in case the prevailing under-recoveries are not adequately compensated, it may adversely impact the OMCs’ ability to purchase crude oil. The Minister stated that “In order to reduce under-recoveries on petrol, OMCs, have, amongst other alternatives, also suggested to the Government to reduce the Excise Duty on Petrol”.
Shri Singh also informed that as per the current Refinery Gate Price (RGP), the OMCs are having under-recovery of Rs 14.29/litre on Diesel, Rs 31.04/ litre on PDS Kerosene and Rs 570.50/ cylinder on Domestic LPG. At these rates, OMCs incur daily under-recovery of Rs 563 crore (Based on RGP effective 16.4.2012 for Diesel and 1.4.2012 for PDS Kerosene and Domestic LPG).
Replying to another question, the Minister said that during 2010-11, the contribution to the Central Exchequer through taxes/duties on crude oil and petroleum products, from dividend to the Government and income tax was Rs 1,36,497 crore. The Excise duties on Petrol and Diesel are specific at the rate of Rs 14.78 per litre and Rs 2.06 per litre (including education cess) respectively. The Excise duties on PDS Kerosene and Domestic LPG are NIL. Hence, Central Government revenue does not increase with increase in the price of these products. Shri Singh under pointed and that The Central Government provided Rs 41,000 crore to the OMCs to part fund their under-recovery of Rs 78,190 crore; and Rs 2904.25 crore and Rs 22.32 crore under the “PDS Kerosene and Domestic LPG Subsidy Scheme 2002” and “Freight Subsidy (For Far Flung Areas) Scheme, 2002” respectively.
He also informed that the total contribution to the State Government Exchequer through VAT, Royalty, Octroi, Entry Tax and Dividend income etc. in 2010-11 was Rs 88,997 crore. “Rates of Sales Tax/VAT are either ad-valorem or ad-valorem plus specific basis. Whenever there is an increase in Retail Selling Prices of these petroleum products, the State Government’s Sales Tax/VAT collection goes up correspondingly,” he added.
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