Government announces bailout package for oil companies

Steep duty cuts to sharply impact government revenue kitty. Fiscal deficit under pressure; Consumers to pay high fuel bills; Will push inflation higher.

By Soma Banerjee, ET Bureau | Updated: Jun 24, 2011, 09.09 PM IST

Steep duty cuts to sharply impact government revenue kitty. Fiscal deficit under pressure; Consumers to pay high fuel bills; Will push inflation higher.

Petroleum minister Jaipal Reddy announces Government bailout package:

Elimation of customs duty on crude oil.

Customs duty on diesel and petrol by 5%.

Revenue loss of Rs 26,000 crore for year 2011-12.

excise duty on diesel cut from Rs 4.60 per litre to Rs 2 a litre revenue loss of Rs 23,000 crore.

Only Rs 2 per litre kept on diesel for in lieu of additional tax.

Total revenue loss Rs 49,000 crore for full fiscal 2011-12.

Price of diesel increased by Rs 3 a litre PDS.

Kerosene increased by Rs 2 a litre.

Domestic LPG by Rs 50 a cylinder (ex Revenue yielded for oil companies Rs 21,000 crore on account of price hike
Projected losses of oil companies despite the package will be more Rs 1,20,000 crore for fiscal 2011-12)

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