NEW DELHI: India’s finance ministry on Tuesday said it does not expect a cut in dividend from oil marketing companies despite these retailers absorbing Re 1 per litre from last week.
India’s economic affairs secretary in a tweet said there is no plan for reduction in subsidy and disinvestment target will also be met.
He was reacting to reports of reduction of dividend from oil marketing companies, subsidies cut, lesser disinvestment revenue etc during this fiscal from the Budget estimates.
“…This is completely fabricated. Nothing of this is true at all,” he tweeted.
As far as disinvestment is concerned, the has set an ambitious target of Rs 80,000 crore for the current financial year. In the Budget for 2018-19, Finance Minister Arun Jaitley said the Department of Investment and Public Asset Management (DIPAM) will move forward to bring in more exchange traded fund (ETF), including launching a debt fund.
Also three insurance companies National Insurance, United Assurance and Oriental Insurance will be merged to create a single entity, which would be listed on the bourses, he had said.
With regard to hit on state-owned fuel retailer for absorbing Re 1 per litre of petrol and diesel prices, industry sources said the move will bring down their profit by Rs 9,000 crore on an annualised basis.
For the remainder of the ongoing fiscal, it would be Rs 4,500 crore, with IOC’s share being roughly half and the rest is split equally between HPCL and BPCL.
Almost half of the fuel price is made up of taxes. The Centre, prior to the excise duty cut, levied a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy value-added tax (VAT).
The hike in duties in 2014-16 had led to excise collections from petro goods rising from Rs 99,184 crore in 2014-15 to Rs 2,29,019 crore in 2017-18. States saw their VAT revenue rise from Rs 1,37,157 crore in 2014-15 to Rs 1,84,091 crore in 2017-18.
Petrol and diesel prices were cut by a minimum Rs 2.50 on October 5 when the government’s cut in excise duty of Rs 1.50 per litre and state-owned fuel retailers providing a Re 1 per litre subsidy came into effect. In BJP-ruled states, the reduction was higher as they matched the cut with a similar reduction local sales tax or VAT.