Petrol Pricing in India: June 2008

Highlights

• Petrol price hiked by Rs 5 per litre
• Diesel price hiked by Rs 3 per litre
• LPG cylinder to cost Rs 50 more
• Kerosene prices remain unchanged
• Customs duty on crude, diesel & petrol, other
petroleum products reduced to nil, 2.5 and 5.0 per
cent, respectively.
• Excise duty reduced by Rs 1 on petrol and diesel.


Impact

• The direct impact on headline inflation of around 51 basis
points
• The total impact (direct + indirect) on inflation to amount
to 95 basis points
• The under-recoveries of the OMCs expected at Rs 2,453
billion with oil price at around $130/barrel
• Government to issue oil bonds worth Rs 946 billion in
2008-09
• Revenue loss of Rs 220 billion expected as a result of
reduction in customs and excise duty
• The oil marketing companies are expected to gain Rs 382
billion due to the price hikes and excise duty reduction
• Refining companies are expected to gain Rs 120 billion
from customs duty reduction
• Under-statement of fiscal deficit estimated on account of
off-budget liabilities on oil at 1.8 percentage of GDP