October 4, 2017 / 10:43 AM / 8 months ago

Oil ministry seeks 5 percent cut in value added tax from states on petrol, diesel

NEW DELHI (Reuters) - India’s oil minister Dharmendra Pradhan said on Wednesday his ministry has asked for a 5 percent cut in additional state levy, a day after the federal government cut factory gate tax on petrol and diesel to protect retail consumers from high global crude oil prices.

India's Oil Minister Dharmendra Pradhan speaks during an interview with Reuters in New Delhi, India, May 5, 2016. REUTERS/Adnan Abidi/Files

The finance ministry had earlier ruled out lowering factory gate duties on petroleum products citing pressure on government finances.

“By taking cognizance of the whole scenario, the prime minister has given direction to the finance ministry and the oil ministry to look into this aspect and rightly, I don’t see this as an issue of loss or gain,” Pradhan told reporters.

“There is about $10 difference between crude oil prices and petroleum prices,” Pradhan said.

India on Tuesday cut factory gate tax on petrol and diesel by 2 rupees ($0.0308) per litre, a move analysts said could widen the country’s fiscal deficit.

($1 = 65.0350 Indian rupees)

Reporting by Nidhi Verma and Neha Dasgupta; Editing by Malini Menon

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