Government looks at ONGC to share the burden and reduce fuel price hike

As Fuel prices continue to skyrocket, the government has finally decided to take the issue into consideration. The government is cautious as to not let anything affect the fiscal deficit targets, which is why the finance minister is careful so as to not take a hit on excise duty levied on petrol and diesel.

The government is reportedly looking at ONGC to share the burden. A government official said, “The Ministry plans to direct ONGC to sell its crude oil at below ruling international prices by capping the price at, say, $70 for the entire fiscal year. Oil India Ltd (the other national oil producer) will not be a part of this scheme.”

As reported by Indian Express Report, ‘The government official said that ONGC’s contribution could pare the required price increase in petrol and diesel by one-third with an additional marginal relief provided by reducing the dealers’ commission by 18 paise per litre on diesel and 23 paise per litre on petrol. Further, ONGC’s burden-sharing would provide close to Rs 30,000 crore for this exercise, which is equivalent to an Rs 2-per litre cut in excise duty on both petrol and diesel.

PTI reported an official saying, “Rising fuel price is a crisis situation for the government and it has to be handled with combination of steps. Finance ministry is consulting the petroleum ministry on rising crude prices”.

Notably, petrol prices on Thursday were hiked by 26 paise to Rs 85.29 per litre in Mumbai, while in Delhi, petrol was retailing at Rs 77.47 per litre on Thursday.

Image Source – Autocar India