9 May 2012

Oil Sector contributes over Rs 1, 62,000 crore towards Central and State-Exchequers in April-December 2011 Subsidy & Tax Component on Petroleum Products


The Minister of State for Petroleum and Natural Gas Shri R.P.N. Singh informed the Rajya Sabha in written reply today that during 2010-11 the contribution of Petroleum Sector to the Central Exchequer through taxes/duties on crude oil and petroleum products, dividend to the Government and income tax, etc. was Rs 1, 36,497 crore and Rs 84,404 (provisional) crore in a 2011-12 (April – December, 2011). The Minister further informed that the contribution to the State Government Exchequer through VAT, Royalty, Octroi, Entry Tax and Dividend income etc. in  was Rs 88,997 crore in 2010-11 andRs 78,427 (provisional) crore in 2011-12 (April – December, 2011) respectively.
          Shri Singh emphasied that the Government provides fiscal subsidy of Rs 0.82 per litre on PDS Kerosene and Rs 22.58 per 14.2 kg cylinder on Domestic LPG under the “PDS Kerosene and Domestic LPG Subsidy Scheme, 2002”. In addition to this, the Government is modulating the price of Diesel, PDS Kerosene and Domestic LPG, resulting in incidence of under-recovery to the Public Sector Oil Marketing Companies (OMCs) on sale of these products.  This is being compensated by the Government and the upstream oil companies under the Burden Sharing Mechanism. The details of subsidy given by Government and under-recovery incurred by the OMCs on Diesel, PDS Kerosene and Domestic LPG are given below:-

           S. No.

Diesel
PDS Kerosene
Domestic LPG
RS / Litre
RS / Cylinder
1
Subsidy given by Government under the subsidy scheme
N.A.
0.82
22.58
2
Under-recovery incurred by OMCs *
13.91
31.49
480.50
3
(1+2)
Total Subsidy (in effect) to consumers
13.91
32.31
503.08
4
Retail Selling Price (RSP), at Delhi
40.91
14.83
399.00
5
Desired RSP*
56.56
47.89
879.50
* As per Refinery Gate Price effective 1st May, 2012.
PS: Petrol Prices have been de-regulated since 26.06.2010                                    
He added that the prices of crude oil and petroleum products in the international market fluctuate on daily basis depending on several factors including demand and supply conditions in the world. The average price of Indian basket crude oil during the year 2011-12 was $ 111.89/ barrel. Shri Singh explained that refining of crude oil is a process industry, where crude oil constitutes around 90% of the total cost. Crude oil is processed through several processing units.  Each of these units produces intermediate products streams, which require further reprocessing and blending.  As it is difficult to apportion the total cost amongst individual refined products, product-wise costs are not identified separately.
          He also provided the details of taxes levied on Petrol, Diesel, PDS Kerosene and Domestic LPG as below:
Taxes included in Retail Selling of Petroleum Products at Delhi
(Effective 1st May 2012)

S. No.
Components of Price
Petrol*
Diesel
RS / Litre
% in RSP
RS / Litre
% in RSP
1
Price without Customs duty, Excise duty and Sales tax/ VAT
39.05
59.5%
33.48
81.8%

Central Taxes




2
Custom duty (based on May 2012 1st  Fortnight Refinery Gate Price)
0.87
1.3%
0.91
2.2%
3
Excise Duty (Including Education Cess @ 3%)
14.78
22.5%
2.06
5.0%
4
(2+3)
Total Central Taxes
15.65
23.8%
2.97
7.3%

State Taxes@




5
VAT
10.94
16.7%
4.46
10.9%
5
Total State Taxes
10.94
16.7%
4.46
10.9%
6
(4+5)
Total Taxes
26.59
40.5%
7.43
18.2%
7
(1+6)
Retail Selling Price at Delhi
65.64

40.91


S. No.
Components of Price
PDS Kerosene
Domestic LPG
RS / Litre
% in RSP
RS / Litre
% in RSP
1
Price without Customs duty, Excise duty and Sales tax/ VAT
14.12
95.2%
399.00
100%

Central Taxes




2
Custom duty
Nil
0%
Nil
0%
3
Excise Duty
Nil
0%
Nil
0%
4
(2+3)
Total Central Taxes
Nil
0%
Nil
0%

State Taxes@




5
VAT
0.71
4.8%
Nil
0%
5
Total State Taxes
0.71
4.8%
Nil
0%
6
(4+5)
Total Taxes
0.71
4.8%
Nil
0%
7
(1+6)
Retail Selling Price at Delhi
14.83

399.00

*as per IOCL   @state taxes vary from state to state.

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