Centre to lose Rs24,000 crore on petroleum duty cuts: Finance ministry

Pegging the losses on account of duty cuts on petroleum goods at Rs 24,000 crore in 2011-12, the finance ministry today said it would take steps to restrict fiscal deficit to 4.6 per cent of the GDP.

"We are losing about Rs 24,000 crore (remaining nine months of 2011-12), and then Rs 10,000-11,000 crore loss will be of states (on account of devolution of tax receipts)," finance secretary Sunil Mitra told PTI.

On annualised basis, the loss on account of duty cuts would have been Rs 49,000 crore. However, since the rate cuts take effect for the remaining three quarters, the total loss will be around Rs 35,000-36,000 crore, including share of states.

On the fiscal deficit target, which has been fixed at 4.6 per cent of the Gross Domestic Product (GDP) for 2011-12, Mitra said, "We have to do whatever we need to do to ensure we are able to reach the target."

The government last weekend hiked the price of diesel by Rs 3 a litre, kerosene by Rs 2 a litre and cooking gas by a steep Rs 50 a cylinder to help the oil marketing companies to partly cover up the losses on account of sale of petro products.

However, while raising the prices, it also slashed customs and excise duties to limit the burden on common man.

The price of crude oil in the international market, according to Petroleum Ministry, has gone up from $75 per barrel in June, 2010, when the prices of diesel, kerosene and LPG were raised last, to $110 per barrel. India imports about 84 per cent of its total crude oil requirement.