Dual diesel pricing at same pump difficult to implement: FM

Says dual rates for bulk and retail consumers was taken in order to keep diesel subsidy at reasonable levels

Finance Minister P Chidambaram today said it was being found difficult to charge a market price for luxury cars and a subsidised price for farmers and transport trucks at the same petrol pump.

"We have knocked our heads together to see if it is possible to have dual prices of diesel at the same retail outlet (petrol pump)," he said replying to supplementaries during Question Hour in the Rajya Sabha. Stating that selling diesel at two different rates at the same petrol pump was difficult, he said the government is open to suggestions of implementing dual rates for diesel provided two different prices does not “lead to black marketing”.

The government had last month introduced market rates for bulk consumers like railways and state road transport corporations, which are over Rs 11 per litre more than the price at which diesel is available at petrol pumps. However, at petrol pumps there is no differentiation, as consumers, farmers as well as luxuary car owners get diesel at subsidised rates. Reacting to demands for allowing state road transport corporations to buy subsidised diesel, Chidambaram said having dual rates for bulk and retail consumers was a “policy decision taken in order to keep diesel subsidy at reasonable levels.”      Members stated that state public transport corporations were finding it difficult to buy diesel at market rates. Chidambaram said central taxes on petrol and diesel had come down between 2007 and 2012. Central excise duty on petrol had come down from Rs 14.66 a litre as on March 1, 2007 to Rs 9.46 on September 14, 2012 while the same on diesel had declined from Rs 4.69 a litre to Rs 3.56 per litre.      "Incidence of taxes on petrol and diesel has come down between 2007 and 2012," the Minister said.      He said while the Central government garnered Rs 95,349 crore in 2011-12 through customs and excise levy on petroleum products, state governments together collected more in taxes than the Centre this financial year.

Centre's take from these levies in 2010-11 was Rs 102,827 crore and during April-December period current financial year was Rs 71,818 crore, he said. "The taxes charged on mainstream petroleum products and the revenue collected from customs and excise duties on petro products has been generally declining for the last three years," he said. The government, had during recent times, shifted to specific rate of excise duty from ad valorem rate to protect consumers when the prices go high, he added.