Oil price to raise import bill by upto $50 bn, no excise cut likely

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SME Times News Bureau | 19 May, 2018
The Finance Ministry on Friday said the rising oil prices may inflate India's import bill by around $25 billion to $50 billion even as it virtually ruled out reducing excise duty on petrol and diesel in the near future.

Economic Affairs Secretary Subhash Chandra Garg said that any increase in crude oil prices has significant impact on the economy and is a cause of concern for the government.

"There was a net impact of around $70 billion last year due to oil prices. This year, there may be an (additional) impact of something between $25 billion to $50 billion under different scenarios," Garg told reporters here.

However, he ruled out any major impact of oil prices on economic growth and said the growth parameters were sound and inflation was within range.

"So on macroeconomic front, the economy is doing well and we are not making any downward revision for growth or upward revision for fiscal deficit," Garg said.

Brent crude oil prices have been hovering near the $80 per barrel mark, the highest since November 2014. A surge in crude oil prices has also pushed the cost of petrol in the country higher with the transport fuel being sold at over Rs 75 per litre in the national capital.

However, Garg remained evasive when asked if the government would cut excise duty on petrol and diesel. He said: "You watch the action. Have you seen any cut? There's been some adjustment in the price which is also taking place. What does that indicate?"

"I won't answer this question more specifically than that," he added.