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government increased the price of petrol by Rs 5 per liter against the required
increase of Rs 21.43 per liter, diesel by Rs 3 per liter against the required increase of
Rs 31.58 per liter and LPG by Rs 50 per cylinder against the required increase of Rs
353 per cylinder. There was no increase in the prices of kerosene.
The Union government also reduced custom duty on crude to nil from 5% to 2.5%
from 7.5% on petrol and diesel, and from 10% to 5% on other petroleum products.
The excise duty on petrol and diesel was also reduced by Re 1 per litre.
As a result, a significant portion of the estimated underrecoveries of Rs 245305 crore
will be financed as follows: Rs 22660 crore through duty changes, Rs 21123 crore
from price revision, Rs 40000 crore sharing from upstream companies, oil bonds at
around Rs 135000 crore, and the balance to be absorbed by PSU OMCs.
The current fiscal will be eventful with Reliance Petroleum set to commence
commercial production, while the groundwork for the stalled Nagarjuna Petroleum
slated to start shortly. With a slew of other projects set to come on steam in due
course, India is positioning itself as a refining hub for the global markets.