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Dual pricing for diesel difficult to implement: P Chidambaram, Finance Minister

 "We have knocked our heads together to see if it is possible to have dual prices of diesel at the same retail outlet (petrol pump)," he said.

 

 

NEW DELHI: Finance Minister P Chidambaram on Tuesday said that selling diesel at two different rates at the same petrol pump is difficult and having dual rates for bulk and retail consumers was a policy decision taken in order to keep diesel subsidy at reasonable levels. 

"We have knocked our heads together to see if it is possible to have dual prices of diesel at the same retail outlet (petrol pump)," he said. 

The finance minister added that government is open to suggestions on implementing dual rates for diesel, provided two different prices do not lead to black marketing. 

Last month, the government had introduced market rates for bulk consumers like railways and state road transport corporations, which are over Rs 11 per litre more than the price at which diesel is available at petrol pumps. 

Chidambaram said central taxes on petrol and diesel have come down between 2007 and 2012. Central excise duty on petrol has come down from Rs 14.66 a litre as on March 1, 2007 to Rs 9.46 on September 14, 2012, while the same on diesel has declined from Rs 4.69 a litre to Rs 3.56 per litre. 

"Incidence of taxes on petrol and diesel has come down between 2007 and 2012," Chidambaram said. 

The finance minister said the Central government garnered Rs 95,349 crore in 2011-12 through customs and excise levy on petroleum products. He said the state governments together collected more in taxes than the Centre this fiscal. 

The Centre collected Rs 102,827 crore from these levies in 2010-11 and Rs 71,818 crore during the April-December period of the current fiscal, he said. 

"The taxes charged on mainstream petroleum products and the revenue collected from customs and excise duties on petro products has been generally declining for the last three years," he said. 

The government has in recent times shifted to specific rate of excise duty from ad valorem rate to protect consumers when the prices go up, he added.