`Oil Import Bill May Rise to $50-bn`

Rising crude prices can raise the import bill by up to $50-bn under different scenarios, which in turn will have an impact on the current account deficit (CAD), according to Mr. Subhash Chandra Garg, Economic Affairs Secretary.

Mr. Garg said he was not persuaded by the argument that rising fuel prices would benefit the Central exchequer. His logic was that though there is an ad valorem rate (percentage of the value at which duty is levied) for Custom duty on crude, excise duty is levied at a specific rate on petrol and diesel. At pre-sent, excise is levied at Rs. 19.48 a litre on petrol and Rs. 15.33 a litre on diesel. So, rising crude price may add something to the exchequer through Customs duty, but not excise duty. States levy VAT ad valorem and the rates range between 6% and 40% on petrol and 6% and 28.5% on diesel.