Crude boils

Oil duty recast on the boil
R. SURYAMURTHY

New Delhi, Feb. 18: The government is considering a duty rejig for petroleum products to bridge the gap between global crude prices and domestic retail prices that persists despite last week’s rise in petrol and diesel prices.

This is also expected to send the right political message to the electorate before the assembly polls this year and the general elections later.

Officials said last week’s price hike of Rs 1 per litre of diesel and Rs 2 for a litre of petrol would bridge only Rs 840 crore of the Rs 71,000-crore gap between costs of fuels and their prices.

Though oil bonds — which is the debt that the government incurs to subsidise fuel prices — will cover about 57 per cent of the gap, a large deficit still needs to be addressed.