New Delhi: Owing to the global crude oil price crash, the PHD Chamber of Commerce and Industry (PHDCCI) here on Wednesday urged the Centre to reduce excise duty and value-added tax on petroleum and diesel products by 25 per cent to cut motor fuels prices by Rs 9-10 a litre.
According to D.K, Aggarwal, PHDCCI President, the petroleum products' prices should be in sync with the deceleration in the global crude oil rates, and all its movements must be captured and implemented in the domestic market.
"World economic environment has turned dynamic and there is a drastic fall in the international crude oil prices. It can be a boon for the Indian economy as inflationary conditions will be benign and the price-cost margin of the businesses will improve," Aggarwal said.
International crude oil prices have declined from $63.27 a barrel as on January 6 to $31.13 a barrel as on March 9. Consequently, petrol prices in Delhi decreased from Rs 75.69 a litre to Rs 70.59 a litre during the same period.
However, 50 per cent fall in the global prices had resulted in only 7 per cent decline in the domestic petrol prices, said Aggarwal.
The build-up of petroleum product prices in Delhi consists of various taxes, duties and commissions, including fixed excise duties at Rs 19.98 a litre and VAT at Rs 15.25 a litre.
"As the economy faces a slowdown, because of the banking and NBFC crisis in 2019, now the impact of coronavirus may affect the recovery process that we were expecting from the April quarter," Aggarwal said.
At this juncture, excise duties and VAT on petroleum, diesel and allied products be reduced by 25 per cent to bring down their prices, which would be a big relief to the industry and would boost and kick-start the economic growth, he said.