Skip to main content

FY19 Budget may assume crude oil price at Rs 65/ barrel

By
FY19 Budget may assume crude oil price at Rs 65/ barrel
The on going price rise could mean a higher subsidy on petroleum products this year and the nex
Union Budget 201819 is likely to assume an average crude oil price of Rs 65 a barrel. It was Rs 55abarrel for 201718. Crude oil prices have been rising because of an extension of the earlier production cut deal by the Organization of the Petroleum Exporting Countries (Opec). India imports about 80 per cent of its crude oil consumption.
This publication has learnt from senior government sources that the ongoing rise could also mean a higher than anticipated subsidy on petroleum products this year and the next. For 201718, this had been budgeted at Rs 25,000 crore.For 2018-19, it was projected at Rs 18,000 crore in the medium term expenditure framework.
By the time Finance Minister Arun Jaitley presents the Budget proposals on February 1, it could be Rs 25,000 crore, said an official.“The Finance Ministry and the Oil Ministry have deliberated the issue of rising crude oil prices.It could impact this year and next year´s subsidy outlay,” said an official.
The person said the budget makers are considering whether to keep next year´s target at Rs 25,000 crore as well in light of increasing prices.As of now, the petroleum subsidy is applicable only for liquefied petroleum gas (LPG or cooking gas) and kerosene.
Experts said with global energy scenario changing —the Opec deciding to extend the productioncut deal by a year by keeping 1.8 million barrels per day off the market in 2018 —international fuel prices are set to go up.Raising concerns, the price of non-subsidised LPG had risen 59 per cent to Rs 742a cylinder in November; it rose 16 per cent for a subsidised cylinder, to Rs 496.
The rises were necessitated due to crude oil prices going well beyond the budgeted Rs 55 a barrel for 201718. “For the first six months of the financial year (April-September), cumulative subsidy claims on LPG and kerosene submitted to the petroleum ministry stood at Rs 9,079 crore.This is set to rise further with the recent increase,” said a second official.The LPG subsidy, earlier expected at Rs 13,000 crore, is now set to be around Rs 15,000 crore.
A dollar increase in crude prices is estimated to raise the annual import bill by roughly Rs 10,000 crore.In October, the government had cut the excise duty on petrol and diesel by Rs 2 a litre to tame rising inflation and shield consumers from the rising price of these automobile fuels.It meant a loss in revenue of Rs13,000 crore for the rest of this financial year.On Sunday, the price of petrol in Delhi was seen at Rs 69.15alitre, while that of diesel was at Rs 58.37. Interestingly, in Mumbai, this was seen at Rs 76.61 and Rs 61.21alitre respectively.
CRUDE AWAKENING
Finance ministry, oil ministry discuss surge in global prices
Price assumed for FY18 was Rs 55/barrel
Medium term expenditure framework projects FY19 oil subsidy at Rs18,000 crore; officials mull raising it to Rs 25,000 cr
FY18 oil subsidy Budget Estimates at Rs 25,000 crore
If global prices continue upward, Centre may hike excise duty
On December 10, the price of petrol in Delhi was seen at Rs 69.15 a litre, while that of diesel was at Rs 58.37
In Mumbai, this was seen at Rs 76.61 and Rs 61.21 a litre, respectively
The Business Standard, New Delhi, 11th December 2017

Comments

Post a Comment

Popular posts from this blog

Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

By
  The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.   “The renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,” said Anirudh Damani, managing partner, Artha Venture Funds.   Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthenin...
Post a Comment
Read more

After RBI rate cut, check latest home loan interest rates of top banks for loans above Rs 75 lakh

By
  The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points from 6.50% to 6.25% in its monetary policy review as announced on February 7, 2025. After the RBI repo rate cut, banks such as SBI, Canara Bank, PNB, and Union Bank among others have cut their repo linked lending rates. Most other banks are also expected to cut their lending rates in line with the RBI rate cut. After banks cut their lending rates, their home loan borrowers will have to pay less interest. Normally, when a lender cuts the lending rate, borrowers get two options: Either to go for a reduction in EMIs or reduce the tenure of the loan. The second option will help the borrowers clear their home loan outstanding faster. In case, the borrower goes for reduction in EMI then the lower lending rate of the lender would mean lower Equated Monthly Installment (EMI) for borrowers.   EMI is the amount you will pay on a specific date each month till the loan is repaid in full.A repo rate-linked home ...
Post a Comment
Read more