NEW DELHI, Feb. 13 (UPI) -- Indian Petroleum Minister Murli Deora has sought a 22 cent excise cut on crude oil to check inflation in the wake of reports of a prolonged winter.
He raised this demand in a letter written to Prime Minister Manmohan Singh.
"The excise duty cut on crude oil would have a cascading effect on prices of fuel transportation leaving scope of a possible fall in retail prices of auto fuels through reduced duties," he wrote in the letter.
"This is our proposal to contain rising inflation."
He said that only when prices of global crude oil fall toward $50 a barrel will retail prices of petrol and diesel be reduced.
"Retail prices of petrol and diesel would depend entirely on international prices that have been rising $60 a barrel currently," Deora said.
The Petroleum and Natural Gas Ministry had last month demanded a 22 cent excise duty cut on diesel. The Finance Ministry turned down the proposal on the grounds that it would not control inflation.
India's crude oil basket rose by $1.77 per barrel to $56.93 a barrel last Friday, maintaining an average of over $56 a barrel this month. The basket dipped to $49 a barrel Jan. 18.
"Reduction of duties on crude oil would lower retail prices of diesel, which in turn would lower transportation costs that has been a major cause for rise in the prices of essential commodities," Deora said.
